Permanent Mortgage Guarantee Scheme.

Help for First-Time Buyers and Homebuyers

The original Help to Buy schemes are no longer available in England. However, buyers may still be able to purchase a home with a relatively small deposit or use another government-supported home ownership scheme. The options available depend on where you live, whether you are a first-time buyer, your income, the property's value, and whether it will be your main home. This guide mainly covers England. Different schemes and eligibility rules apply in Wales, Scotland and Northern Ireland.

Has Help to Buy Ended?

The name "Help to Buy" was used for several different schemes.

Help to Buy: Equity Loan

The Help to Buy: Equity Loan scheme is closed to new applicants in England. Under the final version of the scheme, eligible first-time buyers could purchase a qualifying new-build home using:

• A deposit of at least 5%;
• A government equity loan; and
• A repayment mortgage for the remaining amount.

Applications closed on 31 October 2022, with final qualifying purchases completed in 2023. Existing Help to Buy equity-loan customers must continue to comply with their loan terms. They may need permission before selling, remortgaging, making structural alterations or repaying part of the equity loan.

The Earlier Help to Buy Mortgage Guarantee

The original Help to Buy Mortgage Guarantee scheme was a separate arrangement intended to encourage lenders to offer mortgages to buyers with smaller deposits. That historic scheme also ended. It should not be confused with the permanent Mortgage Guarantee Scheme introduced in 2025.

The Permanent Mortgage Guarantee Scheme

The government introduced a new Permanent Mortgage Guarantee Scheme in July 2025. It is designed to encourage participating lenders to continue offering mortgages at between 91% and 95% loan-to-value, allowing some buyers to purchase with a deposit as small as 5%. The government does not lend the deposit to the buyer. Instead, it provides participating mortgage lenders with a guarantee that covers part of their potential losses if a qualifying mortgage is later repossessed. The borrower remains responsible for the full mortgage debt.

Who Can Use a 95% Mortgage?

Availability depends on the participating lender's criteria. A 95% mortgage may be available to:

• First-time buyers;
• Existing homeowners moving home; and
• In some cases, borrowers purchasing a new-build or existing property.

The property will normally need to be the buyer's main home rather than a buy-to-let investment or second home. Each lender will carry out its own affordability and credit checks. The existence of a government guarantee does not mean that an applicant is automatically entitled to a mortgage.

How a 95% Mortgage Works

A 95% loan-to-value mortgage means that the lender provides up to 95% of the property's accepted value and the buyer provides at least 5%. For example, on a property costing £250,000:

• A 5% deposit would be £12,500; and
• A 95% mortgage would be £237,500.

The lender will normally base its calculation on the lower of the purchase price and its valuation. If the buyer agrees to pay £250,000 but the lender values the property at £240,000, the mortgage may be calculated using £240,000. The buyer would then need to fund the difference and the required deposit.

Are 95% Mortgages More Expensive?

Mortgages with a small deposit commonly carry higher interest rates than lower loan-to-value products because the lender is taking a greater risk. The borrower may also have fewer products to choose from. Saving a larger deposit can:

• Reduce the amount borrowed;
• Provide access to lower interest rates;
• Reduce monthly payments;
• Improve the chance of passing affordability checks; and
• Provide more protection if property prices fall.

Moving from a 5% deposit to a 10% deposit can sometimes make a significant difference. Still, buyers should compare total product costs rather than assume that waiting is always the better option.

The Risk of Negative Equity

Negative equity occurs when the outstanding mortgage is greater than the value of the property. Buyers with a 5% deposit have relatively little equity at the start. A modest fall in property values could therefore leave them unable to sell or remortgage without contributing additional money. This risk may be greater where:

• The buyer pays more than the lender's valuation;
• The property is a new build carrying a price premium;
• House prices fall shortly after purchase;
• The mortgage balance reduces slowly; or
• Early repayment charges make it expensive to change the mortgage.

A government guarantee protects the lender, not the borrower, from this risk.

How Much Can You Borrow?

Mortgage lenders do not simply multiply income by a fixed figure. They assess:

• Income and employment;
• Regular household expenditure;
• Loans, credit cards and other debts;
• Childcare and maintenance payments;
• Credit history;
• The mortgage term;
• The applicant's age;
• The deposit and loan-to-value ratio; and
• Whether payments would remain affordable if interest rates increased.

Some lenders may offer around four to four-and-a-half times household income, but this is not a guarantee or universal limit. Higher or lower amounts may be offered depending on the circumstances and regulatory restrictions.

First Homes

The First Homes scheme is available in England and allows qualifying first-time buyers to purchase certain homes at a discount of at least 30% from their market value. In some areas, the discount may be 40% or 50%. The discount remains attached to the property when it is sold, so a future qualifying buyer receives the same percentage reduction. General requirements include:

• All purchasers must be first-time buyers;
• The property must be the buyer's only or main residence;
• The household income must normally be no more than £80,000, or £90,000 in London;
• The buyer must usually obtain a mortgage covering at least half of the discounted purchase price; and
• The purchase must satisfy any additional local-authority criteria.

Local councils may give priority to people with a local connection, key workers or members of the armed forces. Availability is limited to properties specifically offered through the scheme.

Shared Ownership

Shared Ownership allows an eligible buyer to purchase a share of a property and pay rent on the remaining share, usually owned by a housing association or other provider. The initial share may vary according to the scheme and property. The buyer may later be able to purchase additional shares through a process known as staircasing. Costs can include:

• Mortgage payments on the purchased share;
• Rent on the remaining share;
• Service charges;
• Estate or management charges;
• Repair and maintenance costs; and
• Fees when selling or buying additional shares.

Shared Ownership can reduce the deposit required, but buyers should consider the combined monthly cost and the restrictions contained in the lease.

Lifetime ISA

A Lifetime ISA allows first-time buyers to save towards a deposit. A person can generally open one between the ages of 18 and 39 and contribute up to £4,000 each tax year. The government adds a 25% bonus, subject to the scheme rules. To use the account towards a home purchase:

• The property must normally cost £450,000 or less;
• The buyer must be purchasing with a mortgage;
• The property must be the buyer's main residence;
• The account must have been open for at least 12 months; and
• The withdrawal must be handled through the conveyancer.

A withdrawal charge normally applies if money is taken for a purpose not permitted by the scheme.

Right to Buy and Right to Acquire

Some council and housing-association tenants may be eligible to purchase their home at a discount through Right to Buy or Right to Acquire. The rules depend on the type of landlord, the property, the tenant's history and where in the UK the property is situated. A discounted purchase may still involve significant mortgage, repair, service charge, and major works liabilities. Leaseholders purchasing flats should review the lease and anticipated building costs carefully.

Stamp Duty for First-Time Buyers

Eligible first-time buyers purchasing a home in England or Northern Ireland may qualify for Stamp Duty Land Tax relief. Under the current thresholds, no SDLT is payable on the first £300,000 where the property costs no more than £500,000. SDLT at 5% is charged on the portion of the purchase price between £300,000 and £500,000. The relief is not available where the purchase price exceeds £500,000. All purchasers must satisfy the first-time buyer conditions. Someone who has previously owned or inherited a residential property anywhere in the world may not qualify. Different property taxes apply in Wales and Scotland.

Compare the Total Cost

The deposit is only one part of the cost of buying a home. Buyers should also budget for:

• Solicitors' or conveyancers' fees;
• Survey and valuation costs;
• Mortgage product or arrangement fees;
• Stamp Duty or the relevant property tax;
• Removal costs;
• Buildings insurance;
• Service charges or estate charges;
• Initial repairs and furnishings; and
• An emergency fund after completion.

A mortgage with a lower advertised rate may cost more overall if it includes a substantial product fee.

Obtaining Mortgage and Legal Advice

A regulated mortgage adviser can explain which mortgages and home ownership schemes may be available and assess the likely monthly and overall cost. Ask whether the adviser:

• Considers products from across the market;
• Is restricted to particular lenders;
• Charges a fee; and
• Receives commission from the lender.

Your solicitor or conveyancer will deal with the legal aspects of the purchase. Where a discounted shared-ownership or equity scheme is involved, the legal documents may contain restrictions on occupation, letting, alterations, remortgaging, and resale. To find a Conveyancing Solicitor, use the search facility at the top of this page. We recommend contacting several firms to compare their service, experience and fees.