How Did Help to Buy Work? An Archive Guide

Help to Buy was the umbrella name for a group of English government schemes introduced from 2013 onwards to help people buy a home with a smaller deposit. The best known were the Equity Loan, the Help to Buy ISA and, loosely grouped under the same banner, Shared Ownership. This archive guide explains how those schemes worked, why they mattered, and what is relevant today.

• How the Help to Buy Equity Loan worked
• If you still have a Help to Buy equity loan
• How the Help to Buy ISA worked
• Shared Ownership
• What is available now

How the Help to Buy Equity Loan worked

The Equity Loan was an England-only scheme for buyers of new-build homes registered under the scheme. Under the final version of the scheme, a buyer put down a deposit of at least 5%, the government lent a further share of the purchase price as an equity loan, and a repayment mortgage covered the remainder. The government's share was expressed as a percentage of the property's value rather than a fixed cash sum.

The loan itself was interest-free for the first five years. From year six, borrowers began paying interest on the outstanding equity loan plus a small monthly management fee, with the interest rate rising annually in line with inflation as set out in the loan agreement. Scotland, Wales and Northern Ireland ran their own separate schemes with different rules; Help to Buy as described here never applied UK-wide.

The scheme's main advantage was that a smaller mortgage meant a lower loan-to-value and access to a wider range of mortgage products than a 5% deposit alone would typically allow. The main drawbacks were that the government held a share in the property, the repayment amount moved with house prices, interest began after five years, and the choice of lenders was narrower than for a standard purchase.

If you still have a Help to Buy equity loan

Closure to new applicants does not affect loans already in place. Existing equity loans continue under their original terms, and there are three points that most borrowers reach at some stage.

Interest starting after five years

Once the interest-free period ends, the monthly cost of the equity loan is added to your mortgage payment. Many homeowners review their finances at this point, either by remortgaging the main mortgage onto a new deal or by looking at repaying part or all of the equity loan.

Repaying part or all of the loan (staircasing)

You can usually repay the equity loan in instalments or in full before the end of its term. The amount due is calculated as the government's percentage share of your home's market value at the time you repay — so if your home has risen in value, you repay more than the cash sum originally advanced, and if it has fallen, less. A RICS valuation is normally required, and the repayment must be arranged with the body that administers the loan. Minimum repayment amounts and process steps are set out in your loan agreement.

Remortgaging with an equity loan in place

You can normally remortgage while keeping the equity loan, or raise additional borrowing to redeem it, subject to the administrator's consent and the new lender's criteria. Not every lender works with properties that still have an equity loan attached, so the choice of products is narrower than for a standard remortgage and timing needs to be coordinated with the loan administrator and a valuation. Repaying the loan in full removes that restriction for future remortgages.

An adviser can compare the lenders that will work with your situation and model whether redeeming the loan now or later is likely to work out better on your figures. Get in touch if you would like that reviewed.

How the Help to Buy ISA worked

The Help to Buy ISA was a savings account that attracted a 25% government bonus on savings used towards a first home, within set limits. It closed to new account holders in November 2019. Savers who already hold one can continue to pay in under the account's rules and claim the bonus by the deadline set out in their account terms; the bonus is paid to a solicitor or conveyancer on completion, so it cannot be used for the exchange deposit. Property price limits applied, and were lower outside London.

For people saving today, the Lifetime ISA is the equivalent open product: up to £4,000 per tax year with a 25% government bonus, subject to age, property price and withdrawal rules published on GOV.UK.

Shared Ownership

Shared Ownership is a separate scheme that continues to operate. It allows you to buy a share of a property and pay rent on the remainder to a housing association, with the option to buy further shares later — a process known as staircasing. Purchases are typically leasehold, so ground rent, service charges and repair responsibilities need to be factored into affordability, and resale is subject to conditions in the lease.

Eligibility rules, income caps, minimum share sizes and available homes change over time, and the detail differs across the UK, so check the current rules before planning around it. Our guide to shared ownership mortgages explains how lenders approach these purchases.

What is available now

If you are buying today, the Help to Buy equity loan is not an option. What may be relevant instead includes First Homes — a current scheme in England under which eligible first-time buyers may be able to buy a qualifying home at a discount, subject to current scheme and local criteria — plus the permanent Mortgage Guarantee Scheme, which from July 2025 supports participating lenders offering eligible 91–95% loan-to-value mortgages across the UK, the Lifetime ISA, Shared Ownership, 95% loan-to-value mortgages from lenders in the general market, and first-time buyers' Stamp Duty relief in England and Northern Ireland (0% on the first £300,000 and 5% from £300,001 to £500,000, where the price is no more than £500,000; Scotland and Wales have their own separate taxes). None of these guarantees the availability of a particular property or product. Our guide to government schemes for homebuyers is kept up to date, and our first-time buyer guide covers deposits, affordability and the buying process.

If you would like to talk through your options — whether you are buying now or managing an existing equity loan — contact our team or call 0191 580 9890. Your initial consultation is free; if you proceed with an application, a broker fee may apply and is explained and agreed in writing beforehand.

This information is a guide only and should not be relied on as a recommendation or advice that any particular mortgage is suitable for you. All mortgages are subject to the applicant(s) meeting the eligibility criteria of the specific lender. Scheme rules are set by government and administrators and can change; check the current official guidance before acting.