Help to Buy Explained

illustration of Help to Buy Explained

How does Help to Buy work?

The current Help to Buy scheme runs until March 2023 and is available to first time buyers in England only.

The Help to Buy: ISA has been discontinued, with the Help to Buy: Equity Loan as the sole option. The equity loan is a loan from the government that you put towards the cost of buying a new-build home. The amount you can borrow is between 5-20% (up to 40% if you’re buying in London) of the property’s purchase price.

Interest on your equity loan will start after five years. You can repay some or all of your equity loan at any time. 

Help to Buy in Scotland and Wales

The Scottish and Welsh Help to Buy schemes work slightly differently. In Scotland, you can get a 15% equity loan on a new-build home up to the value of £200,000. You’ll pay no interest on the loan for the lifetime of the mortgage.

In Wales, the maximum equity loan is 20% on new-builds worth up to £300,000. Like England, interest starts after five years. You won’t be able to get Help to Buy if you’re in Northern Ireland. 

What are the regional price caps for Help to Buy?

How much you’ll pay for your Help to Buy home depends on what part of the country you’re buying it.

Area Maximum home price
North East £186,100
North West £224,400
Yorkshire and the Humber £228,100
East Midlands £261,900
West Midlands £255,600
East of England £407,400
London £600,000
South East £437,600
South West £349,000

The total cost of buying your new home is the equity loan, your own deposit, and your remaining mortgage.

How do I pay back the Help to Buy equity loan?

It’s important to look at your options and see if a Help to Buy equity loan is right for you.

Years 1-5, you’ll pay:

  • No interest on your equity loan

  • £1 a month management fee by Direct Debit

From year 6, you’ll pay:

  • £1 a month management fee by Direct Debit

  • Monthly interest fee at 1.75% of your equity loan

  • The interest rate will then rise every April, plus 2% interest until the equity loan is repaid in full

When taking out the equity loan, you’ll need to agree to pay it back in full (with interest and management fees on top). 

You’ll have to repay it:

  • at the end of the equity loan term

  • when you pay off your mortgage

  • when you sell your home

The amount of equity loan you pay back will be worked out as a percentage of what your home is worth at the time. If the price of your home has gone up, then so will the loan amount you’ll need to pay. If the value has fallen, the amount you’ll pay on the loan will too.

Am I eligible for Help to Buy?

To qualify for Help to Buy, you’ll need to meet the following criteria:

  • You’re a genuine first time buyer

  • The home you want needs to be within the price cap for your region

  • Anyone else named on the mortgage can’t have owned a home in the UK or abroad

  • You don’t have any existing sharia mortgage finance

Your eligibility will be thoroughly checked, along with your affordability. You’ll also need to sign a legal form declaring that you’re a genuine first time buyer. Read more in our Guide: What Mortgage Lenders Look for in Mortgage Applicants.

What are the pros and cons of Help to Buy?

Help to Buy is a useful option for first time buyers who otherwise wouldn’t be able to get on the property ladder. The good thing about an equity loan to buy your first home is that you won’t need to borrow as much on a mortgage. That means you could get cheaper rates than if you were otherwise taking out a 95% LTV mortgage. 

The scheme has enabled over 200,000 people in the UK to buy a home, but it’s not without its critics. It’s been suggested that it mainly benefits housing developers, as opposed to home buyers.

Be mindful that a lot of good mortgage deals aren’t accessible to you if you’re using Help to Buy. It’s still possible to get a good rate, you might just need some advice from a mortgage broker who has experience with Help to Buy. 

You can read more about the benefits of working with a broker in our Guide: 6 Reasons Why You Should Use a Mortgage Broker.

Help to Buy advantages

  1. You don't need a big deposit

  2. LTV is lower so you could get a more competitive rate

  3. There’s no interest on the equity loan for five years

  4. After five years you'll pay a competitive rate of 1.75% on your loan

  5. Repay your loan when you like

Help to Buy disadvantages 

  1. Your loan is a percentage of your home's value, so the amount you’ll pay back can go up as well as down

  2. Not all lenders offer Help to Buy mortgages

  3. Remortgaging can be difficult

  4. You can only buy a new-build home from a participating developer

  5. You need permission to make improvements to your home, even though you own it 

Read more on the government Help to Buy website to see if it's right for you.

Be mindful that a lot of good mortgage deals might not be accessible to you if you’re using Help to Buy. It’s still possible to get a good rate, you might just need some expert advice

How to apply for Help to Buy

Before applying, you'll need to find your local Help to Buy agent

You should also check you can afford the following:

  • Up to £500 as a fee to reserve your home 

  • A deposit of at least 5% of the property price

  • Other fees (stamp duty, solicitor fees and mortgage broker fees)

  • The monthly mortgage repayments

It’s always a good idea to talk to a specialist mortgage broker before applying for a Help to Buy mortgage. Our Mortgage Experts will look at your situation and explain your options clearly. They’ll also check if Help to Buy is right for you.

It’s especially important to get advice if you have other factors such as bad credit or a complex income. Our Mortgage Experts have seen it all, and aren’t judgemental. Make an enquiry to find out your options.


Our Mortgage Experts are fully-qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.

useful links

Our guides

Applying for a mortgage or understanding your options shouldn't be confusing, yet there are just so many myths doing the rounds and it's not easy to know where to turn to get the right advice.

Our Calculators

Our calculators give you an idea of what you might be able to borrow, what's affordable and a rough estimate of the kind of property prices you can start to look at.

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