First-time buyers and home movers with a deposit of at least 5%. The current scheme will run until April 2021 when it will be replaced by a somewhat reduced version – so get your applications in early. The new version will last until March 2023 – it will only be open to first-time buyers and include lower, regional property price caps.
The Government lends you up to 20% of the property value (interest-free for the first five years). This may substantially reduces the monthly costs in the first five years and should give you access to cheaper mortgage products, as you only need to borrow 75% of the value from the lender. You’ll find too that most major lenders will offer a Help To Buy mortgage: our team will help you decide which offer is best for you.
The Government controls up to 20% of the property value. You will need to pay this back at the end of the mortgage or when you sell, and after year five, you start paying interest on it. The amount you need to repay will depend on the property value at that time. From year six you start to pay interest, but only on the original loan amount. So say you borrow £20,000 but owe £25,000 at the end because the property price goes up, interest is only charged on the original £20,000.
Although the property is in your name, be aware that you will need to seek approval from the Help To Buy agent in certain circumstances, e.g. extending or altering the property, or the price you sell for in the future, for example.