Help to Buy: The Government backed Mortgage Scheme

Helping you to buy your first or next home

Future homeowners can benefit from support through the Help to Buy scheme, a UK Government project delivered by appointed agents and mortgage lenders.

With initiatives such as the Help to Buy: ISA designed for first-time buyers, and other initiatives also available for existing homeowners, Help to Buy supports people to take their first steps on to the property ladder and to mobilise when they want to move on.

Help to Buy initiatives

Help to Buy: ISA

Supporting first-time buyers enter the UK housing market, Help to Buy: ISAs are savings accounts that can earn you 25% top-up on your savings when you come to buy your first home.

Shared ownership

Through Help to Buy: Shared Ownership, you can purchase a share of between 25-75% of your home and pay rent on the remaining share.

Equity loan

Available to first-time buyers as well as homeowners looking to move, equity loans offer 20% of the cost of a newly built home, enabling you to use a 5% cash deposit and 75% mortgage. In April 2021, this will be exclusively for first-time buyers.

Mortgage guarantee

Now closed, this scheme previously offered 95% loan-to-value mortgage products through commercial lenders.

Help to Buy: ISA

How the Help to Buy: ISA works

You can save money for your first home using your Help to Buy: ISA. Using this scheme, your savings can be boosted by 25% by the UK Government.

For every £200 saved by you, you'll receive an extra £50 top-up from the government, meaning you could achieve a maximum of £3,000 government bonus on top of your hard-earned savings.

Saving with the Help to Buy: ISA

When you first open your Help to Buy: ISA account, you can make a single, one-off payment of up to £1,200.

After your first deposit, the bonus you receive will depend on the monthly savings you deposit into your ISA account. You'll receive a 25% bonus on everything you save, up to the maximum of £200 per month.

You won't see your government top-up payments within your account, but the bonus savings you accrue will be claimed when you make an offer on your first home.

The minimum you amount of money you will need to have saved is £1,600 before you can receive the minimum government bonus of £400.

The maximum amount of money you could receive from the government is £3,000. You will need to have saved £12,000 yourself to achieve this.

However, Help to Buy: ISA accounts are based on individuals, rather than households. If you are purchasing your first home with a partner who is also a first-time buyer, you can each use separate ISA accounts and receive separate bonuses, even though you are buying a property together.

You could be given a combined total of £6,000 towards your first home from the government, providing that you each save £12,000 in separate Help to Buy: ISAs.

How your monthly savings work

You can save a maximum of £200 per month into your Help to Buy: ISA, following a maximum initial deposit of £1,200 in your first month. As long as you don't exceed your monthly allowance, you can make as many deposits as you need within any given month.

Your monthly allowance follows calendar months. If you open your account in the last week of June, you only have until the end of the month to make your initial deposit of up to £1,200. In this example, that would mean your final opportunity to make your deposit would be 30 June. During the following months, you can make deposits of £200 anytime between the start and end of the month, for example, between 1 July and 31 July.

There are no rules on the minimum you need to save each month. As long as you don't exceed £200, the amount of money you transfer into your savings account each month is up to you.

However, if you pay less into your account one month, or skip your monthly deposit altogether, you can't make this up later. Paying £200 into your Help to Buy: ISA in January, in February and in March will create a total savings of £600. If you paid in just £50 in January, in February and in March, and wished to make up the £450 you failed to deposit later, this wouldn't be possible.

Withdrawing money from your Help to Buy: ISA

You are allowed to withdraw money from your Help to Buy: ISA. However, you aren't permitted to transfer your money straight back into your account, and you'll still be limited to depositing a maximum of £200 per month. To achieve the best possible savings with the highest bonus, it's better not to withdraw any money from your account.

When you are ready to purchase your first home, you should ask your bank, building society or credit union to close your account. You'll be given a closing statement when your account is closed. Do not withdraw your funds yourself, or your bonus cannot be claimed.

How to receive your Help to Buy bonus

To receive your bonus from the Help to Buy: ISA, you need to use your account savings towards the purchase of your first home. You will not get your bonus if you do not purchase a house or decide you want to use your savings for something else.

When you are nearing the point of exchanging contracts, before completing on your house purchase, you'll need to instruct your solicitor or conveyancer that you want to use the money from your government bonus towards your first home. You may want to make your mortgage provider aware as well. Your solicitor or conveyancer will follow standard processes and can charge you a maximum of £50+VAT for handling your Help to Buy: ISA and government bonus.

At this point, you'll be advised to close your Help to Buy: ISA account. You won't be able to continue saving and generating more monthly bonuses once the account is closed, so you might want to keep your account open as long as possible.

However, you should follow the advice of your solicitor or mortgage provider. They will have a more realistic idea of how long it could take to close your account and access the funds. It's important not to delay for too long and try to time this wisely to guarantee you'll receive your bonus. You must claim your bonus within 12 months of closing your account.

If you will be exchanging and completing on the same day, you can still claim your bonus following the same processes, but your solicitor or conveyancer may decide to follow an expedited bonus application process that does not require a closing statement if they feel this is needed.

Although you must use the money from your government bonus towards your first home, it can't be used for your deposit when you exchange contracts. As such, it's important not to rely on this to top-up your deposit.

You also won't be able to use the bonus for any costs associated with buying your first home, which includes your solicitor's fee, any estate agent or moving costs, or to set up your new gas or electricity bills. Instead, the money goes directly towards to the house you're buying.

When your bonus will be paid

Only once the purchase of your first home is guaranteed to go ahead will the funds be released from your government bonus.

Your solicitor will claim the bonus after your exchange of contracts but before completion. When the transaction of your government bonus happens, it contributes towards your mortgage deposit, thereby increasing the upfront financial investment you make on your first home.

This is different from the exchange deposit, which is the money transferred when your contracts are signed and exchanged. Your exchange deposit is the down payment on your home, usually worth at least 10% of the total cost of the house for first-time buyers. The bonus is not transferred until after your exchange deposit is required.

Ordinarily, you cannot rely on your bonus for your exchange deposit. However, if it is absolutely necessary that you use your government bonus to top up your deposit to exchange contracts, ask your solicitor or conveyancer about your options. On some occasions, a smaller exchange deposit can be negotiated, with your bonus making up the difference.

Who is eligible for the Help to Buy: ISA

The Help to Buy: ISA is specially designed for people buying a property for the first time. You are a first-time buyer if you don't own a home in the UK or elsewhere in the world and never have.

If you have a property in a trust, for example, through a will or divorce, you may not be considered a first-time buyer. You are still a first-time buyer if:

  • you are named in the will of a person who is still living, or
  • the trust was created for the purpose of selling the property following a death or divorce, and the property was never transferred to you, or
  • you are acting in a trustee role and will not be a beneficiary.

Additional criteria for qualifying for your Help to Buy: ISA bonus when purchasing your first home:

  1. You must be purchasing a property in the UK.
  2. If you are purchasing a property outside of London, it must not be above the maximum price of £250,000.
  3. If you are purchasing a property in London, it must not be above the maximum price of £450,000.
  4. You can only use the bonus for a home where you intend to live.
  5. You won't qualify if it is not the only home you own.
  6. You must purchase the property with a mortgage to qualify.
  7. You need to have opened your account by 30 November 2019.

It's possible to combine the bonus from your Help to Buy: ISA with support from other UK Government Help to Buy schemes, such as shared ownership and equity loans.

Managing your account

A variety of financial institutions have made the Help to Buy: ISA available for those saving to be first-time buyers. Previously, accounts could be opened with any bank, building society or credit union that offered a Help to Buy: ISA.

Unfortunately, it's no longer possible to open a new Help to Buy: ISA account, but the scheme will continue running for accounts that were opened by midnight on 30 November 2019. If you close your existing Help to Buy: ISA, you can no longer open another one.

Re-opening or transferring your account

If the purchase of your property falls through, you can re-open your ISA with the same provider. You'll need to make the request within 12 months and you may be asked to present a Purchase Failure Notice (PFN).

If your original provider no longer offers this scheme, they should give you notice of this and they must help you open an account with another provider.

You can transfer your Help to Buy: ISA to another bank, building society or credit union as long as they also offer this product and accept transfers.

If you transfer your ISA to a different bank, building society or credit union, you won't be entitled to make another initial deposit of £1,200. Even though you are technically using a new account, this follows on from your existing Help to Buy: ISA so you won't be considered new to the scheme, and as such, cannot make a second one-off payment.

Deadline for saving and claiming your bonus

If you have a Help to Buy: ISA, you can make payments into your savings account until 30 November 2029. After this, you won't be able to make additional contributions.

After payments into your account close on 30 November 2029, you will have a further 12 months to claim your bonus, which must be put towards buying your first property by 1 December 2030.

Providers

The providers in the scheme, sometimes called ISA managers, are:

  • Aldermore
  • Bank of Scotland
  • Barclays
  • Buckinghamshire Building Society
  • Chelsea Building Society
  • Chorley Building Society
  • Clydesdale Bank
  • Cumberland Building Society
  • Darlington Building Society
  • Halifax
  • HSBC
  • Lloyds
  • Monmouthshire Building Society
  • Nationwide
  • NatWest
  • Penrith Building Society
  • Progressive Building Society
  • Newcastle Building Society
  • Nottingham Building Society
  • Santander
  • Tipton & Coseley
  • Ulster Bank
  • Vernon Building Society
  • Virgin Money
  • West Bromwich Building Society
  • Yorkshire Bank
  • Yorkshire Building Society

Calculate your Help to Buy ISA savings

You can calculate the bonus the Government will give you through this Help to Buy scheme by using the ISA Calculator on their site.

When you're exploring this, it's important to remember the minimum and maximum criteria:

  • You must have savings in your ISA account of at least £1,600 to receive a bonus.
  • If you have saved between £1,600 and £12,000, your savings will be topped-up by 25%.
  • The maximum bonus you could receive towards purchasing your first home is £3,000 per person.

The rules for living in the home you are buying

To be eligible for the Help to Buy: ISA, the property you buy must your first owned property and your only home.

You will not be permitted to rent out the property, and you won't be able to use it as a second residence or a holiday home.

However, there are some exceptions if you are a part of the armed forces or if you have significant changes to your circumstances.

Exceptions for the armed forces

There are some exceptions to the usual rules for members of the armed forces and their spouses or civil partners.

If you are within this group, you are eligible for Help to Buy schemes as long as you intend to use the property as your main residence. This applies even if you are unable to live in your new home immediately after you purchase it, for example, if you are deployed elsewhere. You are permitted to rent the property out until you are able to move in.

Changes to personal or professional circumstances

Nobody can guarantee how the future will look. There is always the possibility that your personal or professional circumstances might change. In some cases, you might find that you need to rent out your property due to your new circumstances.

The Help to Buy: ISA bonus is not applicable for properties that are intended to be rented. Nevertheless, the UK Government will not claim back the bonus if changes to your personal or professional circumstances mean you are forced to change the way the property is used. For example, if you have changes to your employment status or family circumstances and need to rent out your property.

However, if you claimed your Help to Buy: ISA bonus for a property that you never intended to be your main home, the government may ask you to return your 25% bonus.

Using your bonus for new builds or land

As long as you meet the eligibility criteria for a Help to Buy: ISA, there's no problem with using your bonus towards the purchase of a new build property.

You can also use your bonus towards purchasing land for a self-built property. The land can be worth the same figures as a house for sale, which means it can be £250,000 outside of London or £450,000 within London. The land must be within the UK, used for the main home where you intend to live, and purchased with a mortgage.

You cannot use the bonus to construct a building on land you already own. If you already own undeveloped or agricultural land, you'll still be considered a first-time buyer, as long as the land is not being developed into residential property.

Mortgages and Help to Buy: ISAs

Your first home needs to be purchased with a mortgage for your government bonus to be claimed.

To qualify, you need to be named on the title deed of the property, which must be purchased with a mortgage. It isn't necessary to have your name on the mortgage to be eligible for the bonus, but many lenders require all names on the title deed to appear on the mortgage.

Your Help to Buy: ISA and mortgage lender don't have to be provided by the same financial institution.

Help to Buy and other ISAs

Unlike a cash ISA, you can only open one Help to Buy: ISA at a time, although you can transfer your Help to Buy: ISA from one bank to another.

You can also transfer your funds from your Help to Buy: ISA to a Lifetime ISA, but you will no longer be eligible to receive the Help to Buy bonus. Instead, you will qualify for the Lifetime ISA bonus.

Even if you have already saved into a Help to Buy: ISA, you can take advantage of the Lifetime ISA to save towards purchasing a first home or saving for your retirement.

The Lifetime ISA is for adults under 40 to save up to £4,000 each year, generating an annual 25% government bonus up to the age of 50. Savings can be withdrawn to purchase a first property worth up to £450,000, or after the age of 60.

You can save into both the Help to Buy: ISA and the Lifetime ISA schemes, but you'll only be eligible for one bonus to buy your first home.

Raising complaints about the Help to Buy: ISA

If you are experiencing issues relating to your Help to Buy: ISA, the first thing to do is raise this directly with the provider responsible. Keep a record of the dates, times and content of your communications in case you later wish to refer to these or use them as evidence.

To address issues relating to your ISA provider, make a complaint directly to your bank, building society or credit union. If you feel their response has not addressed your complaint to your satisfaction, you can contact the Financial Ombudsman Service:

  • Email: complaint.info@financial-ombudsman.org.uk
  • Call: 0300 123 9123.

In much the same way, for problems with your solicitor or conveyancer, you should raise this issue as a complaint directly to your firm. If you are not satisfied with their response, you can contact the Legal Ombudsman:

  • Submit via Legal Ombudsman website
  • Call: 0300 555 0333

For conveyancers who are not registered solicitors, forward your complaint to the Council of Licensed Conveyancers:

  • Email: clc@clc-uk.org
  • Call: 0207 250 8465.

Complaints about how your government bonus application is processed can be made by contacting the Help to Buy scheme administrator:

  • Submit via Help to Buy website.

Scheme documents

You must understand and comply with the scheme rules if you wish to participate in the Help to Buy: ISA scheme, and you will also be asked to sign an official declaration.

Shared Ownership

How Help to Buy: Shared Ownership works

Not everyone can afford the mortgage on an entire home, which is why the Help to Buy: Shared Ownership initiative was created. It enables you to purchase 25-75% of your home.

You'll have the option to later purchase a bigger share or the remaining share if you can afford to, so you can own your home outright. In the meantime, you'll pay rent on the share that you don't own.

Who is eligible for Help to Buy: Shared Ownership

In England, you can purchase a home through the Help to Buy: Shared Ownership scheme if:

  • your total household earnings are £80,000 a year or less and you live outside London, or
  • your total household earnings are £90,000 a year or less and you live within London, and
  • you are a first-time buyer, or
  • you previously owned a home but can no longer afford to, or
  • you are a shared owner looking to move to another shared ownership property.

You have the option to purchase a new build or buy a home from a housing association through a resale programme. Regardless of which you choose, Shared Ownership properties are always leasehold. If you later buy the remaining shares of your property, it may become freehold.

Most people will need a mortgage to afford their Shared Ownership property, but that's not a requirement of the scheme. It's up to you whether you take out a mortgage for your share or fund this through your savings.

You can use your government bonus in combination with a Shared Ownership scheme, as long as you meet all eligibility criteria.

Priority groups

People in the armed forces are given priority through the Help to Buy: Shared Ownership scheme. In addition to military personnel, local councils may identify other priority groups for their Shared Ownership programmes, reflecting the housing needs in that area.

People with disabilities

People with long-term disabilities can apply to purchase a home with Shared Ownership through Home Ownership for People with Long-Term Disabilities (HOLD). However, applications can only be made through HOLD if properties that are available for purchase through other home ownership schemes don't meet your needs. For example, this might be because you require a ground-floor flat or a bungalow.

Older people

There's a specific home ownership scheme designed for people aged 55 and over, called the Older People's Shared Ownership. Participants of the Older People's Shared Ownership scheme can only buy up to 75% of their home and, at this point, they won't be required to pay rent on the share they do not own.

How to apply for Help to Buy: Shared Ownership

To purchase a home using the Shared Ownership scheme, find a Help to Buy agent in the area where you want to live. Appointed agents will be able to guide you through the process and share specific advice about the location they cover.

Property price cap

The property price cap for shared ownership properties applies to the full sale price of the property, rather than the price of the share.

Through Shared Ownership, you can pay a percentage of the full sale price for your equity. If you pay £100,000 for 50% equity share of a property, then its value would be £200,000 at the full sale price. You may also wish to ask your conveyancer to also include the value of rental payments throughout the lease to the sale price.

If you are unsure, you can ask your solicitor or conveyancer to confirm whether the full price of a property falls within the property price cap for your area. This is important if you'd like to ensure your property is priced within the range that keeps you eligible for a government bonus.

Equity Loan

How Help to Buy: Equity Loans work

The Help to Buy: Equity Loans scheme helps you purchase a home with a 5% cash deposit and 75% mortgage. Through an equity loan, the UK Government can lend you the value of up to 20% of a new build property and you won't be charged any loan fees for the first five years of owning your home.

Although this scheme is available for residents in England only, there are similar schemes run in Scotland, Wales and Northern Ireland.

Who is eligible for Help to Buy: Equity Loans

Equity loans have been available to homeowners and first-time buyers alike, but this changes in April 2021.

Coming into action on 1 April 2021, the new Help to Buy scheme will operate until 31 March 2023, and, at this point, equity loans will be targeted towards those who are most in need of this support.

Until April 2021, the current Help to Buy scheme will continue to run unaffected, but all homes must reach legal completion by 31 March 2021.

From April 2021, the criteria for equity loans is as follows:

  • Available for first-time buyers only, equity loans will be exclusively available to people who haven't previously owned or purchased property.
  • Regional property price caps set the upper limit for the value of homes that can be purchased through the Help to Buy scheme. These are based on local markets and vary region by region.

Property price caps

Designed specifically to enable people to move to new build properties, equity loans are available for houses worth up to £600,000 in London. Elsewhere in the UK, there are regional property price caps based on the housing markets in those locations.

The regional property price caps for April 2021 to March 2023 are:

  • North East - £186,100
  • North West - £224,400
  • Yorkshire and The Humber - £228,100
  • East Midlands - £261,900
  • West Midlands - £255,600
  • East of England - £407,400
  • London - £600,000
  • South East - £437,600
  • South West - £349,000