Help to Buy
The Help to Buy scheme is there to help both first-time buyers and next-time buyers. There are two schemes, 1 and 2.
Scheme 1 is to purchase a new-build property with as little as a 5% deposit. The government provides upto 20% of the purchase price (maximum £600,000). You must pay back the governments share within 25 years. Although you won’t pay any interest on the 20% government bit for the first five years of the mortgage loan, after five years you will be charged 1.75% above the base rate (currently 0.5%).
Scheme 2 is basically for a next-time buyer with again a minimum of 5% deposit. It is for a new-build or second hand home. The government is basically guaranteeing the lender on any losses over 80% of the property value. You cannot have any interest in any other property and therefore this must be your only property.
Scheme 1 is relatively widespread with a number of lenders offering this type of mortgage. However, at this time there is only Halifax and Nat West offering scheme 2 with a few other lenders expected to come into the market in 2014.
