Your dream home with just a 5% deposit
Here, you’ll find all the information you need to understand Help to Buy, so you can begin your journey towards buying your dream home for a price you can afford.
For use by both First Time Buyers and existing homeowners, Help to Buy is a government-backed scheme which is available until April 2021, set up to support you in buying your dream home by making the initial deposit payment and monthly mortgage repayments more manageable.
What is Help to Buy and how does it work?
Instead of financing the full 25% deposit yourself, with Help To Buy you pay a 5% deposit and the government tops this up with an equity loan of 20% of the overall purchase price.
You are then left with just 75% of the purchase price to mortgage, that will lower your monthly bills by opening you up to more affordable mortgage rates.
Do you really only need such a small deposit with Help to Buy?
Yes - with the Help to Buy scheme, you only need a 5% deposit, which will then be topped up with an additional 20% by the Government. It isn’t just for first-time buyers either; anyone can apply, including previous homeowners, whether they’re looking to scale up or down.
Am I eligible?
If you’re a looking to buy a new home up to the value of £600,000 (£300,000 in Wales), then Help to Buy could be for you. When considering the Help to Buy scheme, remember that this must be the only home you own and you cannot rent out or sublet your home once purchased. Whilst currently applicable, this criteria will be charging as of March 2021 the Help to Buy scheme will only be available to First Time Buyers and will carry regional price caps.
How does the equity loan work?
Although your mortgage repayments will include interest, you won’t be asked to pay any interest on your equity loan during the first five years. You only need to repay your equity loan within 25 years or when you sell the house, but you can choose to pay it back before then.
Isn’t a 95% mortgage better?
Not necessarily; with the government adding 20% to your 5% deposit, you actually only need a mortgage for 75% and you still own 100% of your home. Essentially, Help To Buy allows you to benefit from a slightly lower mortgage, which reduces your monthly payments.
FAQ’s regarding the Help to Buy scheme (applicable until March 2021)
What happens if I already own a home and want to use Help to Buy to purchase another?
For existing homeowners, you must sell your home before being eligible to use Help to Buy. The property purchased must also be your only home and lived in.
Can I use Help to Buy with another buying scheme?
Help to buy cannot be used in conjunction with any other purchasing schemes.
What kind of mortgage do I need?
Mortgages taken out for use with the Help to Buy scheme must be repayment based and cannot be interest only.
Help to Buy calculator
At Morris Homes, we understand that raising a deposit isn’t always an easy task, which is why we offer the Help to Buy scheme to each of our customers who are dreaming of moving into one of our new home developments. You can use our Help to Buy calculator to better understand how the scheme could help you towards owning the home of your dreams. Start your search by entering your chosen property’s price and we’ll take it from there.
The home you want, at the price you want.
Make your money go further with Help to Buy. First time buyers or existing homeowners can buy a new home with just a 5% deposit and a 20% equity loan – available on all new builds in England under £600,000. Easily find homes within your price range using our handy Help to Buy calculator.