Help to Buy – Wales

Help to Buy Wales is a Welsh Government-backed scheme designed to make homeownership more accessible for buyers in Wales. While the UK Government’s Help to Buy scheme closed in 2023, Help to Buy Wales remains open and will continue to run until September 2026.

This scheme provides eligible buyers with a shared equity loan of up to 20% of the property’s value, making it easier to secure a mortgage with just a 5% deposit. Unlike the former UK-wide scheme, Help to Buy Wales is specifically tailored to the Welsh housing market, with different property price limits and eligibility criteria.

Whether you’re a first-time buyer or moving home, this guide will explain everything you need to know about Help to Buy Wales, including who qualifies, how it works, and how to apply. If you’re looking for a way to get onto the property ladder in Wales, this scheme could help make your dream home a reality.

What is Help to Buy Wales?

Help to Buy Wales is a government-backed scheme designed to make homeownership more accessible. Running until September 2026, the scheme allows eligible buyers to take out a shared equity loan of up to 20% of the property’s value, reducing the amount they need to borrow from a mortgage lender.

This makes buying a home more affordable, especially for first-time buyers or those with a smaller deposit.

How does Help to Buy scheme Wales work?

Under Help to Buy Wales, you can borrow up to 20% of the home’s value through a government-backed equity loan while contributing at least a 5% deposit. The remaining 75% is covered by a repayment mortgage from a qualifying lender.

Key details of the scheme:

• Interest-free for the first 5 years (interest applies from year 6 onwards)
• Available only for homes built by registered Help to Buy Wales builders
• The maximum property price has been lowered to £250,000 for the current phase

After five years, interest starts at 1.75% and increases annually. You can repay the loan at any time, either gradually or in full, through a process called ‘staircasing’. Your mortgage application is not means-tested, and you have to be a UK resident.

You can do this all the way until you own 100% of the house.

Example: buying a £200,000 house with a 15% equity loan

How to apply for a Help to Buy Wales Mortgage

Applying for Help to Buy Wales is similar to a standard mortgage process but includes two extra steps: securing the government-backed loan and purchasing a qualifying property.

Here’s a quick step-by-step guide

• Find an eligible property: It must be built by a registered Help to Buy Wales builder
• Apply for the Help to Buy equity loan: Submit your application through the Help to Buy Wales website
• Secure your mortgage: Apply for a repayment mortgage with a Help to Buy-approved lender
• Receive approval and proceed with the purchase: If both applications are approved, you can complete the purchase as normal

A mortgage broker can guide you through the process, ensuring you find the best mortgage deal.

Can I remortgage a property I bought through Help to Buy Wales?

Yes, the process won’t be any different because you used the scheme. To find out more, take a look at our guide to Help to Buy remortgages.

What are the advantages of Help to Buy Wales?

Help to Buy Wales offers several key advantages that can make buying a home more affordable and accessible.

They include…

• You can buy sooner: The scheme can help you buy a home sooner, as you’ll need a smaller deposit. The loan also increases affordability, making house purchases accessible to those who earn less.
• The monthly repayments are lower: You can make repayments at a more favourable rate – as the government’s loan is interest-free for the first 5 years. You may also access cheaper mortgage rates from your lender – as the government’s contribution means you’ll be borrowing less overall. It’s also worth remembering that, with repayment mortgages, some of the first few years can be the most expensive. Though you’ll be paying interest at a normal rate to your lender, a half-decade of interest-free payments on your government loan may help ease the financial pressure in the early days. After five years, the government’s loan will start to increase. It’s worth mentioning that this rate is still quite competitive in the market conditions at the time of writing.
• It’s flexible: You can repay the government loan anytime – and without penalty. This process is called ‘staircasing’, and it can allow you to eventually buy out the government’s share of your property completely. As interest increases on the loan at year six, the sooner you pay it off, the less you pay overall.
• Easier mortgage approval: Since you’re borrowing less, lenders may be more willing to approve your mortgage application, even if you have a smaller deposit or lower income.

What are the disadvantages of Help to Buy Wales?

While Help to Buy Wales can be beneficial, it’s important to consider the long-term financial implications.

• Your choices are limited: You’re limited to builders and lenders signed up for the scheme. You’re also limited to new-build homes – which sometimes come at a premium price compared to older constructions. Help to Buy mortgages are often different from standard mortgages because the government acts as a third party (with a claim on the sale). This means that there is a little less choice.
• Your government loan could become more expensive later: Your first 5 years are interest-free, but after this, the interest rate will begin to increase each year.  In year 6, it’ll be at 1.75%, rising by 1% each year following, plus any increase in the RPI (which is tied to inflation). Even if the RPI falls, the rate will increase by 1% yearly. So, like an adjustable-rate mortgage, if inflation increases significantly, your costs may increase, too. But, as we said earlier, in the current market – the 1.75% rate offered by the government is quite competitive.
• The government loan may affect your capital growth: If you don’t pay off the government’s share of the loan, by the time you come to sell – the government will reclaim its stake at the current market value. Remember, the government’s loan is not fixed – it is taken as a percentage of the house’s value. So, if your house appreciates, you could pay back more than you had initially borrowed. That said, the government would also help to absorb any losses if your house depreciated.
• There may be restrictions on what you can do with the home: As you initially only own a share of the house, you may have to ask for permission for any major changes, such as substantial renovations or subletting.
• The terms of the scheme could change: There’s nothing to say that a future government might not change the terms around Help to Buy, though it would be safe to say that they’ll do this very carefully, considering how many people have used the scheme.

What is the term of a Help to Buy mortgage in Wales?

Your equity loan must be paid off within 25 years or by the time you sell your house. However, you may want to pay it off sooner to reduce the increasing interest that begins at year 6.

As for your Help to Buy mortgage, these work like conventional mortgages. As such, you can choose a range of terms, the most common being 25 years.

Am I eligible for a Help to Buy Wales mortgage?

To be eligible for the scheme, you must:

• Be resident in the UK
• Have a minimum deposit of 5%
• Be buying from a builder who is registered with the scheme
• Be taking out a repayment mortgage with a qualifying lender
• Be buying a home not exceeding £250,000
• Be able to raise the other 80% of the value through a mixture of your deposit and conventional lending.
• Agree not to sublet the house (in whole or in part)
• Don’t already own a home that you’re renting out or planning to rent out once you move.

Speak to a Help to Buy Wales advisor

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0330 818 7026 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.