The help-to-buy mortgage scheme is the UK Government’s latest initiative to help people buy their first home. We have explained the key details below but speak with a Moneysprite help to buy mortgage adviser to fully understand how this government loan works and how it could affect your future finances.  

What is a HTB Mortgage?

A Help to Buy mortgage (HTB) is a mortgage deal under a UK Government scheme to assist first-time buyers in getting on the property ladder. You cannot own or have owned a property anywhere else in the world. With a help-to-buy mortgage, the buyer will require a much smaller deposit than they otherwise would normally require. The rest of the deposit is provided as a loan from the government.

How does HTB work?

Under the help-to-buy mortgage scheme, first-time buyers are only required to put down a 5% deposit minimum. The rest of the deposit is fronted by the UK government with 0% interest for the first five years.

Regional price caps

There are price caps on the amount you can spend to buy your first home. The price caps have been determined by location, based on average property prices. For example, the cap in London is greater than the price cap across the rest of the country. This is implemented to stop wealthy individuals yet to buy a property from abusing the system.

HTB shared ownership

Anyone who still cannot fund the minimum 5% deposit on a property may want to consider using the HTB scheme for a shared ownership property. This is allowed.

You could buy anywhere from 10% to 75% of a property, thus requiring only 5% of the proportion of the property you are buying. You will then pay rent on the remaining proportion of the property you are not purchasing, but you will have the option to purchase it later.