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Help to Buy - How Much Can You Borrow?

If you’re looking for a help to buy, find out how much you can borrow

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 6th May 2020 *

Help to Buy equity loans are government-funded schemes designed to help prospective buyers get a leg onto the property ladder. But exactly how much are you able to borrow for this type of mortgage? 

Jump to our calculator journey to establish what you can borrow, the costs and which of the best deals you'll qualify for.

This guide covers the key information about how much you can borrow with Help to Buy, including:

The experts we work with have helped hundreds of people successfully arrange a mortgage via this scheme. You can give us a call on 0808 189 2301 or make an enquiry for a free, no obligation chat with one of the whole of market mortgage advisors we work with.

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How much can I borrow with a Help to Buy mortgage?

For Help to Buy England and Wales’s 20% equity loan assistance, you must take out a mortgage for at least 25% of the property’s value. The mortgage and your cash contribution combined must be a minimum of 80% of the full purchase price.

How much can I borrow if I live in London?

For London Help to Buy 40% equity loan assistance, your mortgage must account for at least 25% of the value of the property you wish to purchase. Together, the mortgage and your cash deposit must be a minimum of 60% of the purchase price.

If you’re using a Help to Buy loan facility the maximum purchase price of the property is £600,000 for London.

What's the maximum I can borrow?

The maximum you can borrow from Help to Buy in England and Wales is £120,000, and up to £240,000 in London. 

So, if you were to put down the minimum deposit of 5% on a £200,000 property, you could borrow £120,000 using Help to Buy England and Wales.

This is what the breakdown would look like:

Purchase Price £200,000 100%
Mortgage Required £150,000 75%
Deposit Required £10,000 5%
Total buyer contribution £160,000 80%
Help to Buy England Equity Loan £40,000 20%

What are the mortgage affordability requirements?

Provided you meet the general Help to Buy criteria, there are also certain financial requirements, as with any mortgage application.

First of all, you must provide a cash deposit, which needs to be a minimum of 5% of the purchase price. 

If you’re looking to maximise your contribution, it’s possible to put down up to 65% deposit and use the minimum 10% Help to Buy equity loan and minimum 25% mortgage.

What size mortgage can I get?

When you complete your Help to Buy application, you are required to provide details of your proposed purchase, main mortgage, deposit, and your household income. 

How much you can borrow with Help to Buy is capped at 4.5x your household income, and your monthly outgoings must not exceed 45% of your net disposable income.

Use our Help to Buy calculator to work out how much you can borrow.

When using Help to Buy to purchase a home, it’s important that you’ve made arrangements to ensure you can keep up with your repayments if your financial circumstances change. And, equally important, is having a strategy in place to pay off the equity loan.

Get advice from a specialist before you commit to anything.

Costs and repayment terms

A monthly management fee of £1 is payable to Homes England from the start, right up until the loan is repaid. After the first five years, you will pay an additional fee as interest of 1.75%, which will rise annually in line with the Retail Price Index (RPI) plus 1%.

The Help to Buy Equity Loan must be repaid within 25 years, or earlier if you sell your home. If you do sell, you will be required to repay the same percentage of the proceeds as the initial loan (so the more you borrow, the more of the proceeds you will have to part with. Make sure you factor this in when you’re planning your mortgage budget).

Speak to an expert

If you’re not certain whether this scheme is suitable for you, don’t panic. Give us a call on 0808 189 2301 or make an enquiry

The experts we work with will give you impartial advice as to whether this type of mortgage loan is a suitable option for you and let you know how much you can expect to borrow. 

We don’t charge a fee, there’s no obligation and we won’t leave a mark on your credit rating.

Updated: 6th May 2020
OnlineMortgageAdvisor 2020 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

Find out more about Help To Buy

Help to Buy Mortgages