Help To Buy Mortgages. Kensington, London

The help to buy scheme is open to both first-time buyers and homemovers, and can be a great way to get a foot on the property ladder.

The buyer is only required to raise 5% of the property value as a deposit. The government will stump up a further loan of up to 20%, or 40% for homes within London. With a combined deposit of up to 25%, or 45% in London, you will then have access to more attractive mortgage rates from lenders participating in the scheme.

Help to Buy only applies to properties worth up to £600,000. There is no maximum income requirement, but the property must be a new-build home. The property purchased must also be your only residence. You cannot use Help to Buy to purchase a buy-to-let property.

As always, you will need to prove you can meet the mortgage lender’s criteria, which means you should be able to cover the monthly repayments, and your credit score will have to be up to scratch.

For the first five years the equity loan is interest-free. In year six, you will be charged 1.75% which will climb at a rate of 1% of that figure plus any increase in inflation (as measured by the Retail Prices Index (RPI)), every year thereafter. If you don’t repay the equity loan while you are still living in the property, when you come to sell it, the government will reclaim its 20% stake in your home at its current value.