If you are buying a new-build home, and could benefit from a helping hand with your deposit, then the Help to Buy scheme could be right for you.
A Help to Buy equity loan is available on new-build homes in England, Wales and Scotland to both first time buyers and home movers. This enables you to obtain a mortgage with a deposit from as little as 5%.
As long as you are buying a new-build home and meet the eligibility criteria you can apply for a government-funded equity loan for up to 20% of the property's value in England and Wales, 15% in Scotland and 40% in London. You'll then need to pay a minimum deposit of 5% of the sale price and raise the rest of the property's purchase price through a mortgage (unless you are aged 60 or over and in Scotland, in which case you aren't required to take out a mortgage). In England and Wales, there are no equity loan interest fees to pay for the first five years of owning your own home. With the Scottish Help to Buy scheme, no interest is payable for the lifetime of the equity loan. In all cases, you'll need to repay the loan in full, either after 25 years or when you sell your home, whichever is sooner.
This is different to the Shared Ownership scheme, which provides an alternative affordable home scheme and is not restricted to new-builds. It allows you to buy a share of the home and pay rent on the rest. This means you take a smaller mortgage, so the deposit required is lower. However, you need to make sure you budget for your monthly mortgage payments plus the rent.