Policy

Helping people to buy a home

Supporting detail:

Help for home buyers

Help to Buy equity loan

The Help to Buy: equity loan scheme will provide £9.7 billion of additional investment to help people into home ownership. The scheme will help up to 194,000 home buyers, as well as providing a boost to the UK’s construction sector.

The Help to Buy: equity loan is available to all those who aspire to own a new build home that have a 5% deposit but struggle to access or afford the repayments on a low deposit mortgage.

The government will:

  • provide an equity loan worth up to 20% of the value of a new build home, interest free for the first 5 years, which can be repaid at any time or when the home is sold
  • significantly widen the eligibility criteria for equity loans to ensure as many people as possible are able to benefit. The maximum home value will be £600,000 and there will be no income cap constraint
  • ensure that the scheme is open not only to first time buyers but also to all those looking to move up the housing ladder

Help to Buy mortgage guarantee

The Help to Buy: mortgage guarantee scheme helps people buy a newly built home or an existing property with a deposit of only 5% of the purchase price.

The scheme is open for loans to existing homeowners, as well as first time buyers. The loans are available on new and existing houses with a value of up to £600,000.

The Help to Buy: mortgage guarantee scheme will increase the supply of high loan-to-value mortgages by offering a government guarantee to lenders who provide mortgages to people with a deposit of between 5% and 20%.

The scheme is not available for those wishing to purchase a second home or buy-to-let property and only repayment mortgages are offered under the scheme.

The guarantee protects the lender rather than the borrower against losses. Borrowers remain fully responsible for their mortgage payments and any shortfall in the normal way.

Lenders will pay the government a commercial fee for each mortgage that they guarantee, which covers the expected cost of the scheme for the taxpayer.

See the Help to Buy website for more details on both types of the scheme.

Shared ownership

The government also helps social tenants and other first-time buyers to buy a home through shared ownership schemes.

These allow people to buy an initial share of a home and pay rent on the remainder, usually to a housing association. Shared ownership is aimed at first-time buyers who are unable to buy a property suitable for their needs without financial help.

NewBuy

The NewBuy Guarantee scheme was launched in March 2013 and it enables all households, not just first time buyers, to buy a new build home with a 5% deposit. The scheme is industry led and is open to all builders and lenders operating in England.

Help us improve GOV.UK

Please don't include any personal or financial information, for example your National Insurance or credit card numbers.