How does it work?

A mortgage supported by the Help to Buy – mortgage guarantee scheme works in exactly the same way as any other mortgage except that under the scheme the Government offers lenders the option to purchase a guarantee on mortgage loans.

Because of this support, lenders taking part are able to offer home buyers more high-loan-to-value mortgages (80-95%).

You will still be fully responsible for your mortgage repayments. So if you have a 5% deposit, you will need to take out and pay back a 95% mortgage.

Who is eligible?

A mortgage under the Help to Buy: mortgage guarantee scheme works like any other mortgage. Your lender will check that you can afford the mortgage and that you do not have a history of payment difficulties.

To qualify for a mortgage supported by Help to Buy – mortgage guarantee:

the property you are purchasing could be an existing or new-build home in the UK, priced up to £600,000
you must not own any other property anywhere in the world at the time you buy your home supported by the Help to Buy: mortgage guarantee scheme
your mortgage must be a repayment one, not interest only. Offset and guarantor mortgages are also excluded from the scheme
you can’t let out the property to somebody else
your mortgage can be taken out by an individual or individuals but not by a company
you cannot use the mortgage guarantee scheme with any other Government scheme such as Help to Buy: equity loan or shared ownership. Your deposit for the property can’t come from a government scheme either
you don’t have to pay any additional fee to Government to get a Help to Buy supported mortgage
the size of the mortgage you apply for must be less than 4.5 times your income
the Help to Buy (equity loan) scheme in England will also be extended to 2021, one year longer than planned
an extension to the scheme in London will see buyers who can find a 5% deposit given a loan worth up to 40% of the property
the loan will be interest free for five years
elsewhere the existing maximum loan is for 20% of the property’s value.
London Help to Buy scheme to offer interest-free loan worth up to 40% of the value of a newly built home

ISA Help to Buy

If you are a First-time buyer aged 16 or over, the Government will give you a cash boost towards buying your first home if you save into a new type of ISA. Under the new Help to Buy ISA scheme, you can save up to £200 every month and the government will add 25% on top (so £50 on £200). You can also start it off with an initial £1,000 which will have £250 added on top of it.

The minimum you need in to get the bonus is £1,600 (so a £400 bonus), and the maximum the Government will contribute is £3,000 (so that means you will have saved £12,000).

Bond Financial Limited are able to advise you on all the options available to you, making sure that you are aware of all the options available.