Want to know more about the government’s Help to Buy scheme and how it might affect you? We answer some of the most frequently asked questions.
- Does Help to Buy make it easier for me to buy a property?
- Where is the Help to Buy scheme available?
- Will I find it hard to get another mortgage when I move?
- Would I be better off renting, or buying through Help to Buy?
- How do I know which lenders are signed up to the mortgage guarantee scheme?
- How long will the help to buy scheme run for?
- Your next step
Does Help to Buy make it easier for me to buy a property?
It might, if you have at least a 5% deposit saved, can prove you can afford the mortgage payments and meet the provider’s lending conditions (which vary between lenders).
Where is the Help to Buy scheme available?
The Help to Buy Equity Loan schemes are available in England, Scotland and Wales but the maximum price of the property you can buy differs. In England the most you can pay for your home is £600,000, in Wales the limit is £300,000. In Scotland the maximum threshold depends on the value of the property and when your application is completed. For example, applications completed on or before 31 March 2018, the maximum purchase price cannot exceed £200,000
Will I find it hard to get another mortgage when I move?
If your home’s value falls or stays the same, it could be harder to pay back the government’s equity share. This could make it harder to get another mortgage when you move.
The Help to Buy scheme only allows you to take out a repayment mortgage, so the amount you borrow gradually reduces over time. This means by the time you come to sell you should own a bigger proportion of your property, even if house prices haven’t gone up.
Discuss your options with your mortgage lender or broker before you start looking for another property.
Would I be better off renting, or buying through Help to Buy?
This depends on your individual circumstances.
The two schemes are designed to help people who have already made the decision to buy and who have a deposit of at least 5%, and can afford the mortgage repayments. But make sure you can afford the other costs, such as the legal fees and Stamp Duty.
How do I know which lenders are signed up to the mortgage guarantee scheme?
You can find more information about lenders taking part on the Help to Buy website.
How long will the help to buy scheme run for?
The plan was originally to run the scheme until December 2016 with the Bank of England reserving the right to stop the scheme before then. However in the 2014 Budget the chancellor announced an extension to the Help to Buy Equity Loan scheme until 2020.
Your next step
This article is provided by the Money Advice Service.
