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Help to Buy equity loan scheme (2021-2023)

There is a new Help to Buy scheme 2021-2023 targeted at first time buyers. We explain details of the new Help to Buy scheme including how it works, how to qualify and potential pitfalls to be aware of, as well as, timelines for when the original Help to Buy scheme ends.

Help to buy

What is the Help to Buy equity loan (2021-2023)?

The government has updated the terms of the Help to Buy equity loan for the period (2021-2023). The scheme lends you up to 20% of the value of a new build home you want to buy, interest-free for the first five years.  Under the updated Help to Buy scheme (2021-2023), you must now be a first-time buyer and the new build home you buy must be within the relevant regional price cap.

With a Help to Buy equity loan, you can borrow up to 20% of the value of the property, which means that you could buy a home with just a 5% deposit, and a mortgage for the remaining 75%.

According to 2020 figures from the Ministry of Housing, Communities and Local Government, four fifths of the 291,903 properties bought via the scheme were by first time buyers.

Help to Buy for a £200,000 property

Are all first time buyers eligible?

Not all first time buyers are eligible. You and anyone you’re buying a home with must:

  • not own a home or residential land now or in the past in the UK or abroad
  • not have had any form of sharia mortgage finance

This means if you are buying with a partner who has previously owned a property, you will not be eligible. This will also include properties you may have owned in the past but have never lived in, for instance an investment property or a holiday home.

If you are married or in a civil partnership, you will need to apply with your spouse or partner so you won’t be able to take advantage of the scheme by having only one name on the mortgage.

You will need to sign a legal declaration to confirm that you are a genuine first-time buyer.

Help to Buy (2021-2023): Regional price caps

These caps are set at 1.5 times the current forecast regional average.

Region Maximum property price
North East £186,100
North West £224,400
Yorkshire & 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

help to buy regional prices

Find out how much you can borrow with fee-free mortgage advice from our award-winning mortgage brokers L&C. Start the process online or over the phone now

How does the Help to Buy equity loan work?

There are a few things that you need to understand about how the Help to Buy equity loan works:

  • You borrow a percentage of your home’s value, not a fixed amount
  • If your home increases in value, so does the amount that you owe – the same is also true if the value falls
  • You’ll need to pay a £1 management fee every month until the loan is repaid
  • The first five years of the Help to Buy equity loan is interest-free
  • After the interest-free years, you’ll be charged 1.75% on the outstanding amount as interest. This fee will increase each year by RPI plus 1%
  • You only repay the interest, not the equity. If you want to make a dent in the amount you owe, you need to make ‘staircasing repayments’, outlined below
  • You don’t have to repay the equity until you sell your home, or you reach 25 years (whichever is earlier).

Help to Buy mortgages

Apart from the Help to Buy equity loan, you will need a repayment mortgage to cover the rest. There are a number of Help to Buy mortgage lenders including:

  • Barclays
  • Halifax
  • NatWest
  • Santander
  • Nationwide Building Society
  • Post Office
  • TSB
  • Virgin Money

Once you have spoken to a Help to Buy agent in the area you want to buy or a local developer registered with Help to Buy (see below), and are successful getting your loan, you can add this to your deposit and get a mortgage for the remaining amount you need.

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How do you repay a Help to Buy Equity Loan?

Since the Help to Buy loan is interest-free for the first five years, it’s advisable to repay as much as you can before this period ends.

You can make part repayments, known as “staircasing”, to reduce your ongoing costs when the interest-free period ends, and to start paying off the equity you’ve borrowed. Staircasing will also mean that you’re entitled to a greater share of the total sale proceeds when you sell.

Things you need to know about staircasing:

  • You can make repayments at any time
  • Repayments must be at least 10% of your home’s current market value
  • Staircase payments may be subject to other criteria set by your lender
  • Every time you want to make a repayment, an independent valuer must assess your property – and you’ll have to pay for this (£200)

For more advice on repaying your help to buy equity loan before selling read our guide on Selling a Home with a Help to Buy Equity loan

Can I remortgage a Help to Buy home?

After the interest-free five-year period, you may want to remortgage and either keep the equity loan from the government, or use a new mortgage to repay the Help to Buy loan. The latter option will increase the size of your standard mortgage, but you’ll find more lenders and options available to you.

Some homeowners will choose to remortgage and repay the equity loan because it means they will benefit from any increase in value – but they should beware that it may mean the monthly mortgage repayments go up.

What you should know about remortgaging with a Help to Buy equity loan:

  • If you want to remortgage, you’ll need to pay a £115 administration fee to Homes England.
  • Homes England’s Mortgage Administrator will need to approve any increase in your first charge mortgage.
  • When paying back the equity loan, either through staircasing or when you come to sell your home, the sum you owe will depend on the most recent valuation of the property.
  • Not all lenders offer mortgages on Help to Buy homes. If you want to remortgage to get a better deal, while keeping the Help to Buy equity loan, you’ll find a much smaller range of products available to you.

We’ve partnered with the award winning L&C mortgage brokers. They’ll check the deals and criteria of 90+ lenders to find you the best remortgage deal.

Can I sell my Help to Buy home?

You can sell your home bought with the Help to Buy equity loan at any point. If you still owe money on the equity loan, this will need to be paid from a share of the sale’s proceeds. For example, if Homes England assisted your purchase with a 20% contribution, your repayment will be 20% of the total market value when the home is sold.

You should be aware that if the value of your home has increased, the amount you need to repay will also increase. For example, let’s consider a home worth £200,000 and bought with a 20% government equity loan worth £40,000. If the value rose by 10% to £220,000, the amount borrowed would also grow by 10% and you’d need to repay the government £44,000 – an extra £4,000.

However, if the value of the home falls, then the amount you owe would also fall.

Is the Help to Buy Equity Loan scheme right for me?

There are many pros and cons to the Help to Buy scheme. The HomeOwners Alliance welcomes this scheme as a way of helping people who might otherwise struggle to get on or move up the property ladder. But there are some concerns, particularly around risks of negative equity, which buyers will want to bear in mind:

  • New build properties depreciate, in the same way that a brand-new car does. You need to beware of house prices dropping and the risks of falling into negative equity.
  • You will benefit most from this scheme if you can pay off the equity loan within the first five years, before the interest kicks in.
  • There are other costs involved when buying a home such as stamp duty and legal fees and more costs of buying and owning you may not have thought of. This potentially adds up to 10% of the cost of purchasing the property.
  • You need to ensure you’re able to afford a capital repayment mortgage alongside the fees and equity loan repayments (see our guide mortgages made simple). Interest only mortgages won’t be available for people buying with this scheme.
  • Just because this is a Government scheme, it doesn’t mean you’ll get any more protection. It is your responsibility to keep up repayments on the mortgage and equity loan.
  • If the home you are buying is leasehold, make sure there are no fire safety issues and ask your conveyancer to scrutinise the lease and look out for any onerous terms such as escalating ground rent. See our guide for more on leasehold problems.

What is Help to Buy shared ownership?

Shared ownership is a different scheme that allows buyers to own a share of a property while renting the rest of the property from a housing association or developer.

How do I apply for Help to Buy?

It’s important to get independent advice before you apply for the Help to Buy scheme, as there may be another option that is better-suited for your personal circumstances. You can talk to mortgage brokers L&C for free.

If you want to go ahead with a Help to Buy application, there are five steps to the process:

  1. Find an eligible new build and a local Help to Buy agent
  2. Prepare to pay the associated fees:
    • A reservation fee (minimum £500)
    • A deposit on exchange of contracts (at least 5% of the property’s value)
    • Conveyancing fees and other costs due on completion
  3. Complete a Help to Buy “Property Information Form”, available from the house builder
  4. Reserve the home
  5. Send the signed Property Information Form and a copy of the builder’s signed reservation form to the Local Help to Buy Agent.

You’ll then need to go through the new build conveyancing process, and your conveyancing solicitor will need to liaise with the Help to Buy agent at a few key points when you’re buying your new home.

For more general advice on what to look out for when buying a new build home, see buying off-plan and top tips for buying a new build

Leave a comment (43)* Required

  1. HettiHetti

    HTB lone interest free period is coming to an end soon. After starting to pay internet, is it possible to buy a another buy to let property with out settling existing HTB ?


    Can you please indicate how long the process takes when I decide to part pay my HTB, who do I start the process with, can I request a fact sheet step by step advice with expected timeframe.


  3. KarenKaren

    Do i need to get a DIP before applying for the Authority to Proceed or is this done by the mortgage advisor after the ATP has been approved?

  4. MillieMillie

    Hi I got a quick question my HTB 5 years free will come to end soon do I have to contact Target to arrange for monthly interest payment or they will send statement first?

  5. Dean ParrottDean Parrott

    I’ve split up with my wife. We’ve got help to buy with our property, which my wife still resides.
    What are my options regarding getting another mortgage for myself?

  6. CharlieCharlie

    Can I put in bi fold doors if I have a help to buy loan? Also could I do a small extension?

  7. vikiviki

    My HTB equity is currently at 52k.
    If the house price goes up to 65k but we have the 52K from the original price, do we still pay 1.75% on the 13k that the house went up by? Or do we just have to pay 13k?

    Also if we decide to pay 10% of the equity, so 26k. Then when we pay the other 26K does it go from the house price we first paid the 10% or will we need to re- evaluate again?

  8. RBRB


    I have a HTB equity. I intend to take a car loan to change my existing car as it is bit old now. Will I have to take approval from HTB agent before taking the loan.


  9. Louise WhiteLouise White

    If i owned a house and sold it 8years ago would i still be eligible for the help to buy scheeme?

  10. LaurenLauren

    My partner has a help to buy loan on his house that he now does not live in but his ex partner still does. Is this a breach of contract on his behalf?

  11. BasilBasil

    I understand that I cannot have a residential property at the time of completing on a help to buy mortgage HOWEVER if I already have a help-to-buy property am I able to get a buy-to-let mortgage for a second property?

  12. delia comandelia coman

    I do have a question! If I want to break a wallin my house, buy i’m still in the 5years, i didn’t payed yet back the Help2Buy help, am I allowed to do this? Anybody knows? Thank you!

  13. Giovanni PerriGiovanni Perri

    Thanks for the article. 1 question:

    What if I have a lump sum and want to pay it back before the end of the 5 years? i.e. If my HTB is £60k and I want to pay the whole £60k back today?

  14. SubbaSubba

    I want to remortgage my htb property which is remortgaged this year. Accepting the penalty from the mortgage provider and to get the new mortgage for paying off the htb 20% will be beneficial in the long run. Will there be any good mortgage out there?

  15. IustinaIustina

    On the Help to Buy scheme its stipulated that the house it should be new. But it doesn’t said how new it should be or from what year it should be made…

  16. Mikel BroadMikel Broad


    I have a help to buy property however I am now moving abroad for the foreseeable future due to covid-19. What course of action can i take as I will not be living or buying another property in the UK for the meantime?

  17. GrahameGrahame

    Hi I have had my help to buy approved and my property was due to be completed this year now due to Covid 19 the build is now delayed my builders are telling me that the new scheme will be in place in December. I understand this is not the case and the new scheme is not in place till the 1 April is this correct and is there any delay in place for people who have an agreement in place
    Many thanks

  18. LauraLaura

    Hi, we are currently selling our home and hoping to buy a new build as our forever home using the help to buy scheme, Mortage and deposit. However given the cv-19 situation everything has been delayed and so we may not be able to get our new build before the March end date. Is it possible that the current scheme will be extended so we are still able to use this? .

  19. S BlackwellS Blackwell

    Hi, We’re applying for and buying a house under the HTB scheme but I’m NOT a first time buyer; my partner is. The rules change in April 2021; does anyone know when the final building inspections need to be done please?

  20. MichaelMichael

    Please advise. I am 5 years in the HTB scheme this October and was intending to combine the 20% to my new mortgage term. However, to my shock there seems to be fees associated including:
    £1200 solicitors fees
    Rics survey – between £300-£500
    Admin fee £200
    Mortgage middle agent fee £300 (unless you process yourself)

  21. PatelPatel

    If I am undertaking transfer of equity to remove my partner, will I have to pay off the help to buy amount?

  22. Louise brownLouise brown

    We are hoping to sell our home and use help to buy to purchase a new build is it correct we have to complete the purchase by DEcember 2020?

  23. HayleyHayley

    After the 5 years of paying the £1 a month back for the help to buy, how much do you pay back a month after that ? Thank you

    • HomeOwners AllianceHomeOwners Alliance

      Hi Hayley – After the interest-free years, you’ll be charged 1.75% on the outstanding amount as interest. This fee will increase each year by RPI plus 1%

  24. Igor Kaparis (the CEO of International Fintech)Igor Kaparis (the CEO of International Fintech)

    Home equity loans are usually second mortgage loans, which customers pay off with monthly payments. Once customers get approved for a home equity loan, they will receive money in a single lump payment and then pay back the loan with interest over a set period of years. “

  25. amelia brownamelia brown

    Great Post

  26. samsam

    Can anyone advise once you send the paperwork off how long it takes to be accepted?

  27. markmark

    house value 196k, mortgage to halifax 138k, was a new build and we had help to buy, would i be able to have additional borrowing from halifax to consolidate existing debts to free up money? my mortgage would increase by £100 a month but my monthly outgoing would be down by £400 a month,i will be calling halifax tomorrow i just wondered if anyone held had success with this method?

  28. Gemna ChurchillGemna Churchill

    I have a help to buy mortgage and coming to the end of the first 5 years and looking in to remortgaging. We have some equity in the property which we would like to release to clear debt. Is this possible. Current lender is nstwest

    • HomeOwners AllianceHomeOwners Alliance

      Hi Gemma, do give our partners at London and Country a call. They can give you fee free, impartial advice. You can call them on 0800 073 2326.

  29. Helen FreemanHelen Freeman

    Hi we have just come to the end of the initial 5 years interest free period and we are looking at remortgage options can you confirm if it is possible to add additional borrowing to our mortgage while still having all or part of the equity loan outstanding? Or is this another restriction we were never told about when taking out the help to buy loan? If we are able to consolidate some of our unsecured lending this would enable us to afford to add half of the equity loan to the remortgage.

  30. Gary SpenceGary Spence


    If I decide to pay off my mortgage early, does this effect my equity loan in any way?


    • HomeOwners AllianceHomeOwners Alliance

      Hi Gary , the mortgage and equity loan are two separate products, with the mortgage being the most expensive so it would make sense to pay off this first. In the first instance, I would suggest you talk to your mortgage provider and your equity loan provider, to check with them.

  31. D HarrisonD Harrison

    After 2 years into the help to buy scheme we have decided now is the time to repay the loan but we are finding the cost of doing so prohibiting. Although there may not be any “fees” the cost of getting a valuation plus solicitors costs and administration fees this could amount to approximately £1,800. This was not explained at the time of taking out this loan.

    • AKerrAKerr

      Hi Denise,
      We’d love to help if we can. Get in touch with us on or 033 0088 2051
      HomeOwners Alliance

  32. Ms LightMs Light

    Your information staates that when you start to pay the equity loan back to Government it would be initially 1.75% PLUS 1%

    What is that other 1% as when I have asked that question specifically to an HTB financial advisor they assured me it would only be the 1.75%?


  33. valerie c whitevalerie c white


  34. Mike JennMike Jenn

    I have just read through your guide and part way through it starts writing about new-build properties. Is this scheme for new-build only and if so wouldn’t it be best to say that at the outset?

  35. EllenaEllena


    I’m hoping to learn more about prepayment penalties for equity loans. Are you able to explain?


  36. Matthew HolmesMatthew Holmes

    We have come to the end of the 5 years and we are now eligible to repay the builders and government loan. We were given a 30% loan through that method however this has since been sold on and interest alone is £75 a month without paying off any equity. This has not enabled us to pay off within the secondary 5 year window as recommended above. What recommendation is given with these circumstance changes?

    • Sophie KhanSophie Khan

      Hi Matthew,

      Thanks for your query. The options available are largely dependant upon your other personal circumstances and would need to be discussed. Do consider becoming a member and we would be happy to work through this with you. Also have a look at information on our guide: Help to Buy Mortgage Guarantee and you may also enquire here:Find your local Help to Buy agent specifically in relation to your circumstance. All the best,

      HomeOwners Alliance

  37. AurimasAurimas

    If I repay equity loan early, e.g. after 4 years, will be the amount recalculated as well? If house price will rise in these 4 years?


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