Your Guide: Help to Buy Mortgages

Navigating the world of Help to Buy Mortgages can be daunting, but don't worry! We've created this helpful guide to support your purchase.

Help to Buy

The Help to Buy equity loan scheme was launched on 1 April 2013 in a bid to help struggling first-time buyers or people finding it hard to move up the rungs of the property ladder.

First-time buyers are eligible for this scheme, but it's only available on new-builds in England and Wales. The scheme remains open and it ends in March 2023, so you can still take a loan out.

Can I Join The Scheme?

It's a common misconception that Help to Buy is only available to buyers with ‘clean credit’ only (ie: no arrears, CCJs, defaults etc).

In fact Help to Buy is available to buyers in all sorts of circumstances, and Create can search a comprehensive range of lenders to find products specific to your needs.


  • You get a Government loan of up to 20% of the property's value, interest-free for the first five years.

  • You only need to borrow 75% of the value from the lender, reducing your loan-to-value ratio and giving you access to cheaper rates than on a 95% mortgage.

In short it works like this...

  • You provide a 5% deposit.

  • The Government then lends you up to 20% of the property price (or 40% if you're buying in London). This part is called the equity loan and it's interest-free for the first five years.

  • The remaining 75% is then covered by a standard mortgage.

How much Can I Borrow?

​Equity loans can be worth as much as £240,000 in London (London Help to Buy equity loans launched in February 2016), £120,000 across the rest of England and £60,000 in Wales.

That's considering the maximum qualifying property value.


  • The Interest kicks in after five years, and could amount to a chunky sum over time.

  • The Government will take the same percentage of the sale price as you opted for when you took out your equity loan (regardless of how much the loan was originally for) when the property is sold.

  • You can repay part or all of the loan early, but the Government will only accept this if it's a minimum of 10% of the property's current value.

If you're unsure what you're looking for, talk
to one of our specialists.

Your options if you've got a Help to Buy Loan


This could be done in two different ways:

  • Remortgage your standard mortgage and keep the equity loan.

  • Remortgage to wipe out some or all of the equity loan, meaning you'll likely end up with a bigger standard mortgage.

Whether or not the remortgaging options above are doable or the right options for you will depend on a number of factors:

  • Payments will need to be manageable for you.

  • Can you remortgage your current deal or are you currently within your mortgages fixed rate or introductory rate period?

  • Be warned, not all lenders accept customers with a Help to Buy mortgage.

  • Is it worth paying off some or all of the equity loan with a new mortgage?

If you decide to go ahead and remortgage, you'll have to pay an admin fee to the administrators of the Help to Buy equity loan scheme.

That's on top of any other fees you may face (such as mortgage fees).

Staying Put

Another option is simply to stay put and start paying the interest or to see if you can get enough money together to pay off the equity loan (you're allowed to repay the loan early without selling your home).

The latter is worth doing if you can afford it, as you'll avoid interest charges – and get full ownership of your property. Otherwise, the Government takes a slice on sale.

It's particularly worth considering if you think house prices are likely to go up a lot as it means you'll pay less to the Government as they'll take the same percentage of the sale price as you opted for when you took out your equity loan.

You don't have to pay off the whole lot in one go. But rules mean you can only repay a minimum of 10% of the property's current value – or the whole loan amount.

Whether paying off the loan in part or in full, you'll need to have the outstanding loan amount assessed. This must be done by a RICS surveyor (RICS stands for Royal Institution of Chartered Surveyors).

It'll cost about £200 for a valuation, but charges vary. You'll also pay an admin fee to pay off the loan. That's on top of any other fees you face.

Selling and Moving

A final option is to sell up, particularly if the property's price has soared – and bank any profits after the loan is repaid from sale proceeds.

This way you'll avoid paying any interest on the equity loan and you might want to take the next step on the housing ladder, or you might be ready for a change.

When you sell, you'll have to pay back the Government loan in full, worth up to 20% of the sale price (whether its value has risen or fallen)

What if my property value has fallen?

Seeing the value of your home fall only really becomes an issue if you want to sell and move or if you need to remortgage.

The Government made a commitment to share in any change in the value of your property through Help to Buy, meaning if you see a 10% drop in the value of your property then you'll owe the Government the original loan minus a 20% share of that drop.

If for example your house was worth £200,000, a 10% drop would mean that your property was now worth £180,000.

A 20% share of the drop in value would equate to £8,000 of the £40,000 Help to Buy equity loan. This means if you wanted to repay the loan, you'll owe the Government £32,000.

Note however, this value is only realised when you sell the property or repay the equity loan. If you're remortgaging and keeping Help to Buy, you'll still have a loan of £40,000.

I want to Remortgage

Create Finance has specialist brokers who can handle even the most complex case, and will walk you through each step if you're looking to borrow additional funds and clear your loan.

I want to stay put

Staying put will mean your expenditure may increase and potentially mean your current mortgage stretches your affordability.

Create Finance can look at the right deal for you and advise accordingly.

I want to sell up and move

Create Finance can help with the purchase of your new property, as well as providing referrals for solicitors to support your sale if necessary.

Need help with Help To Buy? Talk to one of
our mortgage specialists today.

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