Help to Buy is ending: 13 quick-fire questions with a property expert on how to buy your first home with a government loan

Home X's modern apartments for sale in Brighton through housing provider Optivo via the government Help to Buy loan scheme.

Help to Buy is a government-funded scheme designed to help first-time buyers onto the property ladder. - Credit: Optivo

The Help to Buy government scheme is coming to an end in 2023, but there’s still time to take advantage if you need support getting onto the property ladder.  

Rich Login, from housing association Optivo, answers your most-asked questions about the Help to Buy equity loan. He also reveals how you can use the scheme to purchase one of Optivo’s trendy new apartments at Home X, part of the Preston Barracks regeneration in Brighton.  

1. What is a Help to Buy loan? 

A: Help to Buy is a government-funded equity loan for first-time buyers to use as part of their mortgage deposit.   

2. When is the Help to Buy scheme ending? 

A: The scheme finishes at the end of March 2023. This is why it’s advisable to apply for the loan soon if you’re considering buying your first home.  

3. How does the Help to Buy loan work? 

A: Help to Buy is available on new build properties with homebuilders who are registered with the scheme, such as our Home X development in Brighton. After deciding on a property, you apply online via the Help to Buy agent in your region. Your sales agent and/or mortgage advisor can support you with this.

Kitchen in Home X's modern apartments in Brighton, available via the Help to Buy government scheme.

You can apply for up to 20 per cent of the market value of a new build to help towards your house deposit with Help to Buy. - Credit: Optivo

4. How long do I have to repay the Help to Buy loan? 

A: The full loan must be paid back within 25 years. If you sell your home before reaching 25 years, the loan will need to be repaid from the sale. 

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5. What’s the interest rate on a Help to Buy loan? 

A: It’s interest-free for the first five years, rising to 1.75 per cent on the sixth year, gradually increasing by two per cent every following April by the Consumer Price Index (CPI).

6. Who can benefit from a Help to Buy loan? 

A: The Help to Buy loan is for those who need help with their deposit for their first home. Other schemes such as Shared Ownership might suit your circumstances if you perhaps have a lower household salary.

Home X's apartment building in Brighton by housing provider Optivo, available with Help to Buy

Many of Home X’s trendy apartments are available with Help to Buy. - Credit: Optivo

7. Who is eligible for a Help to Buy loan?  

A: Only first-time buyers can apply for the loan. 

8. How much can I borrow with a Help to Buy loan? 

A: The government will fund up to 20 per cent of the market value of the property towards your deposit, providing you have at least five per cent saved yourself. Your mortgage will make up the remaining 75 per cent. 

The property value limit in Brighton is capped at £437,600, meaning any property exceeding this limit can’t benefit from government support.   

9. Will I need to pass financial checks to apply for a Help to Buy loan? 

A: There will be a series of financial checks that will be carried out to ensure you are financially eligible to repay the loan. There are no minimum or maximum earnings specified, but you must be able to obtain a mortgage. Your mortgage advisor can provide guidance on whether Help to Buy would be the best option for you.

Living room in Home X's modern apartments for sale in Brighton through Optivo and available via the Help to Buy scheme.

If you’re a first-time buyer, you might be eligible to purchase one of Home X’s modern one and two-bedroom apartments. - Credit: Optivo

10. Is a Help to Buy ISA different from a Help to Buy loan? 

A: The Help to Buy ISA is a separate savings account that you can pay a maximum of £200 into each month. 

If withdrawing before 2030, the government top up 25 per cent of the amount saved up to £3,000 for you to use towards your first home. You are not required to pay this money back. 

The ISA is designed to promote gradual saving before buying a house, whereas the loan can be arranged immediately to help fund part of the deposit. 

11. Can I rent my property with a Help to Buy loan? 

A: No, the loan is designed to help people make the transition into their first home, so the buyer would need to be moving into the property that they’re purchasing. 

12. Do you pay stamp duty with a Help to Buy loan? 

A: Yes, Help to Buy requires the same stamp duty as buying a home through the regular process. 

13. Is Help to Buy only for new build homes? 

A: Yes, the loan is only accepted towards new-build properties. Home X has approved funding, meaning any of our studio and one-bedroom apartments, plus the majority of our two-bedroom homes are available with Help to Buy. 

For more information on the Help to Buy scheme and the properties available at Home X, visit home-x.co.uk.