Your dream home could be within your reach

For sale signs in Rother. 17/6/13
For sale signs in Rother. 17/6/13
Have your say

With house prices expected to continue rising after hitting a 14-year high in December, It’s best to buy now - with a little help towards the cost.

Help to Buy is a government-backed initiative to help people buy a home. There are two options available through the scheme. These are:

l Help to Buy: Mortgage Guarantee (available across the UK)

l Help to Buy: Equity Loans (available in England)

Whether you are a first-time buyer or moving home, there could be an option that’s right for you.

Help to Buy: Mortgage Guarantee

The scheme works by offering lenders the option to purchase a guarantee on mortgages where a borrower has a deposit of between five per cent and 20 per cent. Borrowers remain fully responsible for their mortgage payments and any shortfall in the normal way.


Borrowers apply for a mortgage through participating banks and building societies or through a mortgage broker like they would for any normal house loan.

To qualify for the mortgage guarantee scheme, you must pass lender affordability checks and have no history of difficulties in meeting debt payments.

How to apply

You can apply for a mortgage guarantee through a participating mortgage provider. Lenders currently participating in the scheme are Aldermore, Bank of Scotland, Barclays, Halifax, HSBC, NatWest, RBS, Santander and Virgin Money.

Help to Buy: Equity Loans

With a Help to Buy equity loan, the Government loans you up to 20 per cent of the cost of a new-build home, so you only need a five per cent deposit and a 75 per cent mortgage to make up the rest.

Help to Buy equity loans are open to both first-time buyers and home movers on new-build homes worth up to £600,000. You cannot sublet your home, and you must not own any other property at the time of purchasing your Help to Buy: Equity Loan home. Part-exchange deals are also not approved.

If a home then sold for £210,000, you’d get £168,000 (80 per cent from your mortgage and the cash deposit) and pay back £42,000 on the loan (20 per cent ). You’d need to pay off your mortgage with your share of the money.

Equity loan fees

You won’t be charged loan fees for the first five years of owning your home.

In the 6th year, you’ll be charged a fee of 1.75 per cent of the loan’s value. After this, the fee will increase every year. The increase is worked out by using the Retail Prices Index plus one per cent

Applying for an equity loan

If you’d like to buy a home with an equity loan, contact the Help to Buy agent in the area you want to live or contact a participating house builder.

For more information, visit