Help to Buy Scheme – Everything You Need to Know (2025)

Help to Buy Scheme – Everything You Need to Know (2025)

If you’re researching government-backed mortgage schemes, you’ve likely come across the now-closed Help to Buy Equity Loan scheme. This government scheme was designed to make homeownership more accessible. While no longer available to new applicants, thousands of first-time buyers used Help to Buy to step onto the property ladder.

The scheme was created to assist people especially first time buyers in achieving home ownership. To qualify, you generally needed to be a first time buyer. Help to Buy allowed eligible buyers to purchase a new build home, only new build properties on registered developments were eligible under the scheme, with regional price caps applying to different developments.

The aim was to make buying a home more accessible. By providing equity loans, the scheme helped many people buy home who might otherwise have struggled to do so. We’ve also included a table of lenders who supported the scheme to provide full transparency.

Introduction to the Help to Buy Scheme

The Help to Buy scheme is a government-backed initiative created to assist people especially first time buyers in achieving home ownership. Recognising the challenges many face in saving for a large deposit, the government introduced several options under the Help to Buy umbrella to make buying a home more accessible.

The most well-known is the Help to Buy Equity Loan scheme, which allowed buyers to purchase a new build home with just a 5% deposit, while the government provided an equity loan of up to 20% of the property’s value (or 40% in London). This reduced the upfront cost and made it easier for buyers to secure a mortgage.

In addition to the equity loan scheme, the government also offered the Mortgage Guarantee Scheme, which helped buyers with smaller deposits access competitive mortgage rates, and the Lifetime ISA, which rewards savers with a government bonus to boost their first home deposit.

These schemes were all designed to assist people in buying their first home, making the property ladder more accessible and supporting the purchase of new build homes across the country.

When Did Help to Buy Start?

Launched in April 2013 by the UK Government, the Help to Buy Equity Loan scheme aimed to support buyers especially first-time buyers by offering a way to purchase a new-build property with a low deposit and reduced borrowing.

Through this scheme, buyers could borrow a portion of the property’s value from the government via an equity loan, reducing the amount needed for a traditional mortgage.

 Key Features at Launch:

• Open to both first-time buyers and home movers (until 2021).

• Available for both houses and flats.

• 5% deposit required.
• Government equity loan up to 20% (40% in London).
• Available for new build houses and flats.
• Remaining balance covered by a mortgage.

The scheme covered a range of property types, including new-build houses and flats, making it accessible to buyers interested in different kinds of homes. Houses and flats both qualified under the eligibility criteria.

Eligibility Criteria

To qualify for the Help to Buy scheme, applicants needed to meet specific eligibility criteria designed to ensure the scheme benefited those who needed it most. For the Help to Buy Equity Loan scheme in England, only first time buyers were eligible, meaning you could not own or have previously owned a home in the UK or abroad.

The property had to be a new build home, purchased from a registered developer, and the property price could not exceed the regional price cap set by the government.

In Scotland and Wales, the rules were slightly different, applicants did not have to be first time buyers, but they could not own another property at the time of purchase. Across all regions, the property had to be a new build and could not be used as a buy-to-let or rented out.

Applicants also needed to demonstrate they could afford the mortgage and had a good credit history, meeting the lender’s criteria. These eligibility criteria ensured that the Help to Buy scheme supported first time buyers and those struggling to save for a deposit, helping them buy a home of their own.

How the Help to Buy Equity Loan Scheme Worked

The Help to Buy Equity Loan scheme played a key role in the government’s initiative to support first-time buyers in stepping onto the property ladder.

Under this scheme, buyers could secure an equity loan from the government worth up to 20% of the property purchase price for new build homes in England (and up to 40% in London). This meant buyers only needed a 5% deposit, with the remaining amount covered by a standard mortgage.

One of the key benefits was that the equity loan was interest free for the first five years, making it more affordable for buyers in the early years of home ownership. After the initial five-year period, a fee was charged on the outstanding loan amount.

The scheme was available for properties with a purchase price of up to £600,000 in England, making it accessible to a wide range of buyers. Since its introduction in 2013, the Help to Buy Equity Loan scheme enabled more than 200,000 first-time buyers to purchase their first home.

Although the scheme closed to new applicants in 2023, those who already have a Help to Buy equity loan can continue to benefit from its terms and support.

Help to Buy Mortgage Options

Buyers could select from a variety of lenders participating in the scheme, and many sought advice from mortgage brokers to find the most suitable deal. In addition to the equity loan, the government also supported buyers through the Lifetime ISA, which offered a 25% bonus on savings used towards a first home deposit.

This combination of government support and flexible mortgage options made it easier for buyers to save, secure a mortgage, and purchase their first home.

Regional Variations

The Help to Buy scheme was tailored to reflect the different housing markets across the UK, with regional variations in both the equity loan limits and property purchase price caps. For example, in London, buyers could access an equity loan of up to 40% of the property purchase price, recognising the higher cost of homes in the capital.

In contrast, the equity loan limit in Scotland was set at 15%, and property price caps varied to reflect local market conditions.

These regional differences ensured that the scheme remained relevant and effective for buyers in all parts of the country. For instance, the higher equity loan in London helped buyers manage the greater financial challenge of purchasing a home in the city, while lower limits in other regions matched local property values.

By adapting the scheme to the needs of each area, the government aimed to assist people across the UK in buying a home, whether in London, Scotland, Wales, or elsewhere.

Help to Buy Benefits

• Just 5% deposit needed.
• Government equity loan reduced mortgage borrowing.
• No interest on the loan for 5 years.
• Access to higher-value homes.
• Supported housebuilding by focusing on new builds.

The scheme made owning a home more achievable for many buyers by reducing upfront costs and providing more accessible loan terms.

When Did the Help to Buy Scheme End?

The scheme was phased out in stages:

• • • December 2020: Closed to home movers limited to first-time buyers only.

    • October 31, 2022: Final applications accepted.

    • March 31, 2023: Final completions under the Help to Buy scheme.

Although the scheme has ended for new buyers, existing Help to Buy homeowners must still repay their equity loan, meaning they owe the government the percentage of the property’s value originally borrowed, which must be settled when selling the property or at the end of the loan term. This is where brokers and advisers can provide significant support.

When & How the Help to Buy Loan Must Be Repaid

The Hep to Buy equity loan must be repaid under the following conditions:

• After 25 years
• When selling the property
• When repaying the mortgage in full
• If remortgaging without government consent

You repay the same percentage borrowed not the original amount.

Example: You bought a £200,000 home with a 20% Help to Buy loan (£40,000). If your home is now worth £250,000, you pay 20% of £250,000 = £50,000.

Before making any payments, review your loan agreement and repayment terms to ensure you understand your financial obligations.

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Help to Buy Interest Breakdown

• Years 1–5: Interest-free
• From year 6: Interest charged at 1.75% and increases each year based on RPI + 1%
• £1/month management fee throughout the loan

Steps to Repay Your Help to Buy Loan

1. Get a property valuation by an RICS-registered surveyor (valid for 3 months).
2. Request a redemption quote via the Target HCA portal.
3. Instruct a solicitor to manage the legal work.
4. Repay using savings, remortgage funds, or sale proceeds.

Who Participated in the Help to Buy Scheme

Alternatives Now That Help to Buy Has Ended

Though Help to Buy has closed, several alternatives are available in 2025:

First Homes Scheme: 30–50% discount on new builds for locals and key workers

Shared Ownership: Buy a share, rent the rest

Mortgage Guarantee: 95% LTV mortgages (ends June 2025)

Lifetime ISA: Save with a 25% government bonus

Right to Buy: Discounts for council tenants

Get the Right Advice When Navigating Help to Buy Repayments

The Help to Buy scheme helped hundreds of thousands of buyers take their first step into homeownership. If you’re one of them, understanding your repayment options is key to avoiding costly mistakes especially when interest charges begin. Make sure to stay up to date with the latest advice and updates to make informed decisions about your Help to Buy loan.

Whether you’re looking to repay the loan, remortgage, or move to your next property, working with an experienced mortgage broker ensures you’re not overpaying or caught off-guard by valuation surprises or lender restrictions.

Get help from an experienced mortgage broker.

You can speak to one of our specialist mortgage brokers who would be able to guide you through the process. They will advise if there is a lender available and the maximum loan amount based on your circumstances. We are a whole of market mortgage brokerage with access to all lenders. Call us on 01332 470400 or complete the form with your details for us to give you a call back to discuss your Help to Buy options with a broker.

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