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Help to Buy Explained

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  3. First Time Buyers
Help to Buy (also known as Help to Buy Equity Loan) was launched by the Government in April 2013 and is current set to run until 2021.

The idea of Help to Buy is it's a scheme which is designed to help hard working people get a foot on the property ladder, by lending the borrower up to 20% (40% for London) of the cost of a newly built property, the borrower then put 5% of their own deposit in and borrows the further 75% (55% for London) in the form of a mortgage, see the illustration below:



The loan is totally interest free for the first five years, after this you can either repay it, generally by refinancing with a new mortgage, or pay nominal interest to the government for the loan.

There are some rules around the scheme which are worth knowing:

  • You must not own another property at the time when you move into the new property (selling and upsizing is fine)
  • The property MUST be a new build property
  • Outside of London the property can not be more than £600,000 in value.
Help to Buy has been an extremely successful scheme, since the launch it's helped the purchase of 169,102 properties (to 31st March 2018) in England, 81% of these buyers were first time buyers.

Interestingly the mean purchase price of properties bought with Help to Buy is £249,708

The benefit of Help to Buy scheme is that when you take your mortgage the lender prices it generally as if you have a 25% deposit, so the rates are much cheaper than if you came with just a 5% deposit yourself.

Our specialist new build team will be able to answer any questions you may have about Help to Buy, click here to arrange a telephone call or an appointment.

This great case study by Help to Buy shows the benefit of the scheme, click here to read it.

There is also this handy Help to Buy Buyers Guide from Help to Buy.
Daniel Dawkins
First Time Buyers Expert Article by
Daniel Dawkins (Mortgage and Protection Specialist)
The Mortgage Hut

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  • What Income Qualifies for a Mortgage?
  • Vendor Gifted Mortgages - what are they?
  • Mortgages & Child Tax Credits
  • How can I get a mortgage for £100k?
  • What is a Joint Borrower Sole Proprietor (JBSP) Mortgage?
  • Can I buy my rental house from my landlord?
  • How can I get a £220,000 mortgage?
  • How can I get a mortgage for £160,000?

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Head office address of The Mortgage Hut
SOUTHAMPTON (HQ)
14 College Place
Southampton
Hampshire
SO15 2FE
Head office phone The Mortgage Hut
023 8098 0304
Head office email The Mortgage Hut
info@themortgagehut.net
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The Mortgage Hut Limited is an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited which are authorised and regulated by the Financial Conduct Authority.

The Mortgage Hut Limited. Registered Office: 14 College Place, Southampton SO15 2FE Registered in England Number: 07629941

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  • The guidance and advice contained in this website is subject to the UK regulatory regime and is therefore restricted to consumers based in the UK.
  • Some products are not regulated by the Financial Conduct Authority.
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