Help to Buy - Government Mortgage Schemes | NatWest

What is Help to Buy?

Understanding the government Help to Buy scheme

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With a help to buy scheme available from the government, your first home could be closer than you think. It is just one of the schemes available to help first time buyers afford their first property and get on the ladder.

The initiative began in 2013, and if you can afford mortgage repayments but are struggling to save up the deposit usually required, Help to Buy might offer the assistance you need. You can take a look at the Help to Buy website or Money Advice Service for more details.

These links are to non-NatWest websites. NatWest is not liable for the accuracy of the information provided on these websites. 

5% deposit

Help to Buy Equity Loan

The first part of the scheme is the Help to Buy: Equity Loan, which is available until 2020. It's open to first-time buyers and people looking to move, and is restricted to new-build properties only.

 

Under the Equity Loan, the buyer only needs to raise 5% of the property value instead of the usual 20% deposit. The government will lend you up to 20% (via the Homes and Communities Agency), giving you a combined deposit of 25%.

 

For the first five years, your loan is interest free. After this, you'll be charged 1.75% which will go up at a rate of 1% of that figure, every year afterwards (plus inflation). Borrowers can repay their Equity Loan at any time though. If you don't repay while still living at the property, the government will reclaim their 20% when you come to sell it.

 

Who is Eligible for an Equity Loan?

 

Equity loans are available to first time buyers, if the property you want to buy is a new build and costs up to £600,000. However, you won't be able to sublet this home or enter a part exchange deal on your old house.

 

The scheme is only available in England – although Scotland, Wales and Northern Ireland have similar programmes run by their respective governments. If you are looking to buy a new-build in a Greater London borough, the government has increased the upper limit for the Equity Loan from 20% to 40%.

About the Help to Buy Equity Loan

5% deposit

Help to Buy: ISA

The Help to Buy ISA is another initiative launched by the government to support people looking to buy a home, it can provide a boost to your savings towards a property purchase.

 

When you purchase your first home the UK Government will pay a bonus of 25% of your closing savings balance e.g. £50 for every £200.

 

So you could get up to £3,000 towards your first home, and like a standard ISA, interest earnt on any savings in your Help to Buy ISA are tax free. 

 

Read more on the Help to Buy: ISA

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