Help to Buy Equity Loan Mortgages

Important update: The Help to Buy equity loan scheme is now closed to new applicants. This page provides historical details about it, information about remortgaging a property that was purchased through the initiative and details about alternatives schemes to consider.

The Help to Buy mortgage scheme has existed in various forms across the UK since 2013, however, the majority of these have since closed and been replaced by newer home ownership schemes. We look at the current availability of Help to Buy schemes across the UK, what alternatives are available, and how to remortgage a home bought using this initiative in the past.

What is a Help to Buy mortgage?

This is a term you might hear used when somebody is applying for a mortgage through the Help to Buy Equity Loan scheme, but it is not an official product as such.

The Help to Buy Equity Loan is not a mortgage, but a product used predominantly by first-time buyers, alongside a mortgage, to assist them onto the property ladder. In England, the most recent Help to Buy scheme ran from 1 April 2021 until 31 March 2023, but is now closed. However, in Wales, a Help to Buy scheme remains available at the time of writing.

This initiative involves a government equity scheme that lends you up to 20% of the cost of a newly built home, if you provide the first 5% of the deposit yourself. You then take out a mortgage using the combined 25% deposit, at 75% LTV, making it easier to qualify for than a typical 90-95% mortgage.

No interest is payable on the equity loan for the first 5 years, but from the sixth year, you will pay 1.75% interest per year. This interest rate increases annually in line with the Retail Price Index (RPI) + 1%.

Is the scheme still available?

The Help to Buy Equity Loan Scheme is no longer available in England or Scotland, and Northern Ireland never adopted this type of scheme. However, Help to Buy Wales is available until 30 September 2026, after being extended a number of times. A slight variation in the Welsh scheme is that it can be used by anyone that qualifies, so is not exclusive to first-time buyers.

However, the Forces Help to Buy Scheme (FHTB) is available to all service personnel across the UK. It works in a similar way, but with the loan being repaid directly from the salary of those using it. This scheme was made permanent and can also be used alongside some other government home ownership schemes.

Is there any word on Help to Buy coming back?

There is no expectation that this scheme will return to England or Scotland at the current time. However, there are a range of other home ownership schemes available, both from the government and within the private sector. Read on or speak to one of the team to find out more about them.

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Remortgaging an existing Help to Buy mortgage

If you used the Help to Buy Scheme to buy your first home, particularly if more than five years have passed and you’re now paying interest on the loan, you’re likely looking for a way to repay it sooner.

The good news is, it’s possible to remortgage your Help to Buy Equity Loan alongside your mortgage. In fact, many lenders will only consider a remortgage for scheme members if they intend to repay their equity loan with the funds at the same time.

While you’ll have utilised the scheme due to low deposit availability/affordability, most people do experience at least one change in circumstances within 5 years. Whether that’s a salary increase, a single income becoming joint incomes, equity growth in your home, or all of the above, it’s likely lenders will look at your circumstances differently now.

In some cases combining the outstanding loan and mortgage balance when you remortgage will be more cost effective, especially as mortgage rates continue to fall. If you’re looking to move on from your Help to Buy Equity loan, speak to one of our brokers today. We’ll look at your current circumstances alongside your level of equity, and recommend the most suitable remortgage options available to you.

Best lenders for a Help to Buy remortgage

Not all lenders will consider remortgaging properties bought through the Help to Buy scheme. However, a good amount will, so long as the full equity loan is repaid, and the applicant becomes the sole owner of their home.

Very few lenders, for example, West Bromwich Building Society, also allow you to remortgage and retain the equity loan. If this is something you’re looking to do, it’s a good idea to speak to a broker, both to ensure it’s the right option for you, and to find a willing lender.

Some lenders that may consider a Help to Buy remortgage are:

• The Bank of Ireland

• Bluestone Mortgages

• Gen H Mortgages

• Halifax

• Natwest

• Nottingham Building Society

• Afin Bank

• TSB

However, keep in mind that each lender has their own individual criteria, and maximum LTV (Loan to Value) for this type of transaction.

Can you refinance with bad credit?

Yes, it’s possible to remortgage a Help to Buy Scheme property if you have certain elements of bad credit, however, as with all bad credit mortgages, this will depend on the severity and age of your credit issues.

However, the type and circumstances surrounding adverse credit issues deemed acceptable by each lender, varies significantly. If you have a history of credit issues and are hoping to remortgage a Help to Buy home, it’s a good idea to speak to a mortgage broker first.

Compare Help to Buy remortgage rates

Help to Buy remortgage rates vary by mortgage lender, depending on your current financial circumstances, and the amount of equity you hold in your home. To see rates from some of the lenders available in this niche, you can use our free mortgage rate comparison tool below:

Best alternatives to the Help to Buy scheme

If you’re still looking to buy your first home (outside of Wales) and were hoping to use the Help to Buy Equity Scheme to do so, there are a range of other home ownership scheme options that may suit you across the UK, for example:

• The Shared Ownership Scheme (Government scheme, UK-wide)

• Deposit unlock (Private sector scheme, UK-wide)

• Rent-to-Buy and Rent-to-Own (Government schemes in England and Wales)

• Rezide Equity Loan (Private sector scheme, England and Wales)

• The First Home Scheme (Government scheme, England only, Limited locations)

• Low-cost Initiative for First Time Buyers - LIFT (Government schemes in Scotland only)

• Co-Ownership (Government Scheme, Northern Ireland Only)

You can learn more about all of the similar schemes that are still available, in our guide to the best help to buy alternatives.

Is the Help to Buy ISA still available?

Not to be confused with the Help to Buy Equity Scheme, the Help to Buy ISA is not a mortgage scheme. It is a savings scheme that the government tops up by 25%, if used exclusively to save for a mortgage deposit, or retirement.

While the scheme is available until 2029 to existing users, it closed to new applicants on 30 November 2019.

Why choose Money Helpdesk for your mortgage needs?

Whether you’re looking for help to buy your first home, a new home, or want to remortgage a property bought through a home ownership scheme in the past, we offer expert advice and specialist home ownership scheme knowledge.

We can also search the whole market to find the most suitable lender for your needs. This can be particularly helpful for borrowers with niche requirements, such as those remortgaging a Help to Buy home with bad credit, for example.

No matter what your circumstances, we’ll make it our mission to secure you the home finance you need at the most competitive price available to you. Get started today.