Help to Buy scheme explained

Help to Buy is designed to help first-time buyers buy a property with just a 5% deposit.  

The government lends you between 5% and 20% of the cost of a new-build home as an ‘equity loan’. In London, this was up to 40%.  

The loan is interest-free for five years.  

The scheme is closed to new applications in England and Scotland. 

Help to Buy in WalesOpens in a new window is available until September 2026.  

For the Welsh scheme, properties need to be from a scheme-registered builder, valued at less than £300,000 and have a minimum Energy Performance Certificate (EPC) rating of B.  

Help to Buy isn’t available in Northern Ireland but other schemes are offered

The equity loan allows you to put down a larger deposit, which can mean you’ll need to borrow less in your repayment mortgage. Help to Buy equity loans are only available on some eligible properties. 

You borrow a percentage of your home’s value, not a fixed amount.  

This means if your home’s value increases or decreases, so does the amount that you owe. 

For example, if your £200,000 property goes up in value by 25% to £250,000, your equity loan repayment would be £50,000, not £40,000, as this would be 20% of the new value. 

Other options are available if you need help getting on the property ladder, like Shared ownership and Rent to Buy.  

These schemes vary across the UK, so check your eligibility and what’s available where you live. 

For England, Affordable home ownership schemesOpens in a new window on GOV.UK.

For Wales, Help to buy a home schemesOpens in a new window on gov.wales.

For Scotland, Help to buy your homeOpens in a new window on mygov.scot. 

For Northern Ireland, Home ownership schemesOpens in a new window on nidirect. 

Read more in our guide about government schemes for first-time home buyers and existing homeowners.

You’ll need to: 

• pay interest on your loan after five years 
  
• pay a £1 monthly management fee  
  
• pay admin fees for any changes. 
  

Visit GOV.UK for help managing your loanOpens in a new window or contact the Help to Buy customer service team on 0300 123 4123Opens in a new window

The percentage you borrow needs to be repaid after 25 years or earlier if you sell your home. 

You start paying interest from the sixth year after taking out the loan interest. 

The interest rate applied to your loan increases each year in April. It goes up by the same rate as the Consumer Price Index (CPI), plus 2%. 

• Years 1 to 5: no fees 
  
• Year 6: 1.75% of the loan 
  
• Year 7 onwards: 1.75% + CPI + 2% (1% if you took the equity loan before December 2019). 
  

Repaying part of the equity loan can reduce your monthly interest payments. This is because the loan amount the interest rate applies to is less. 

You’ll need to have your home valued by a chartered surveyor before you make a repayment.  

The smallest repayment you can make is 10% of the market value of your home.  

You can sell your home at any time, and you’ll repay your remaining equity loan at the same time. 

For example, if you originally bought a home with a 75% mortgage and a 5% cash deposit and have made no other repayments, you’ll repay 20% of the value of your home at the time you sell.  

If you make extra payments, what’s left to pay is reduced. 

The final amount is based on either the market value of your property, or the sale price, whichever is higher.  

Find a surveyor registered with the Royal Institution of Chartered Surveyors (RICS)Opens in a new window to make an independent valuation. 

See GOV.UK for guidance on how to repay your equity loan when you sell your homeOpens in a new window

If you have a Help to Buy equity loan, you can still remortgage. If you don’t want to borrow more money, you don’t need to get permission to remortgage. 

You will have to repay your equity loan when you reach the end of your mortgage term, so keep that in mind if you want to remortgage onto a shorter term.  

Some people choose to remortgage to borrow more money so they can repay their Help to Buy equity loan earlier. It’s worth comparing the interest rates on the equity loan and the mortgage before you decide.   

Visit GOV.UK for guidance on how to repay your equity loan when you remortgageOpens in a new window

If you want to remortgage and borrow more money, you will need to get permission from the administrator of your Help to Buy scheme. You will only be allowed to do this under certain circumstances. 

Visit GOV.UK for guidance on how to remortgage your Help to Buy home and borrow more moneyOpens in a new window

No, but if you're in an area where property values have not increased or have even gone down, this could leave you with negative equity or not enough of a deposit to sell up and move out. 

Discuss your options with your mortgage lender or broker before you start looking for another property.

This means that if the market value of your property falls below the amount you purchased it for, you will repay less than the original amount you borrowed through the equity loan scheme.  

For example, if you purchased a home valued at £250,000 and 20% was made up of an equity loan (£50,000), and the value of your home falls to £200,000, you would only need to pay back 20% of £200,000, which is £40,000.