Help to Buy mortgages - the facts

Over the last year, the housing market as seen a significant increase in demand for mortgages, especially through the government’s scheme Help to Buy

With so many mortgage options, due to even more competition from some of the leading providers, it can become complicated to choose the right plan for you. 

Here is our guide to Help to Buy, with all the information you need to give you a better idea of what it’s about, before making a decision. 

What is Help to Buy? 

Help to Buy is a mortgage scheme, delivered by the government and overseen by the Bank of England, to give homeowners the option of a 95% mortgage on a new-build or existing property. 

This means, when you opt for this scheme, you only need to have a deposit between 5% and 20% for a property worth up to £600,000. 

In April 2013, the first phase of the scheme was rolled out nationwide, but only accepting mortgage applications from first-time buyers.

October 2013 saw the second phase become available, offering to those who are already homeowners to take out a mortgage for either a new-build home or an existing property. 

Who can qualify for Help to Buy? 

Since the second phase of the scheme was introduced, a wide spectrum of homeowners can now apply. 

To qualify to receive a mortgage under Help to Buy, every applicant must pass lender affordability checks and have no history of failed debt payments. 

You must also not have any other owned property anywhere in the world and those looking to re-mortgage can also qualify for Help to Buy. 

What are the terms and conditions? 

As with any other mortgage plan, terms and conditions apply to the Help to Buy scheme:

  • Mortgages must be for residential properties.

  • You will live in your house and not rent it out.

  • The scheme is only available to individuals and not a company. 

  • The scheme cannot be used in conjunction with any other government housing scheme.

Where are Help to Buy mortgages available? 

Since the scheme began, many banks and mortgage lenders have signed up to offer Help to Buy, including the UK’s biggest mortgage lender Halifax

Other providers include: Aldermore, the Royal Bank of Scotland (RBS), NatWest, Santander and Virgin Money. 

Since Help to Buy began, mortgage providers have become even more competitive in a bid to win new business. 

Searching for the best deal can be hard work, so comparing mortgages can give you a better idea on what each lender is currently offering.

When is Help to Buy available? 

Help to Buy is now available at all participating lenders and will be running for three years, up until 31st December 2016. 

The Bank of England is overseeing the mortgage guarantee scheme, to ensure stability and restore the housing market following 2008’s credit crisis. If the scheme is successful, Help to Buy’s duration could be extended. 

Category: Mortgages

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