Government Mortgage Schemes

Find out if you’re eligible for government support with your mortgage. Our article below will tell you everything you need to know.

Home Mortgage Application Government Mortgage Schemes
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: June 4, 2024

In this article, we’ll explain what government mortgage schemes are currently available, how to get one, which scheme could be right for you and why using the services of a mortgage broker can boost your chances of securing the approval you need.

What government schemes are available for mortgage applicants?

Whether you’re a first-time buyer or a current homeowner, there are quite a few initiatives the British government has in place to give mortgage applicants a helping hand. A broker would be able to share the nuances of each but, in the meantime, below are some brief descriptions of what’s available.

Help to Buy equity loan

One of the UK government’s first-time buyer schemes, this allows those looking to buy a new build property to put down a bigger deposit. The government provides an applicant with an equity loan of between 5% and 20% (40% if in London) of the property’s value while you put up at least 5%. You do not make any monthly payments towards this loan and it is interest-free for the first five years.

This scheme is not currently available to new applicants in England (since March 2023) but is still available in Wales until March 2025.

Help to Buy: Mortgage guarantee scheme

Launched in 2021 and available until the end of December 2023, this scheme sees the government underwrite 15% of an applicant’s mortgage as long as they have a 5% deposit. This removes the risk for the lender and encourages them to offer more 95% loan-to-value ratio mortgages.

Who is eligible?

Those who can apply for the mortgage guarantee scheme are:

  • Applicants with a 5% deposit
  • First time buyers and existing homeowners
  • Looking at a residential property less than £600,000

Help to Build equity loan

If you’d like to build a home in England, this scheme allows an applicant to take out an equity loan from the government of between 5% and 20% to be put toward the cost of the land and building of the property.

Who is eligible?

Those who can apply for a Help To Build equity loan are:

  • Planning to live in the newly-built home
  • Able to get approved for a self-build mortgage with a lender registered with the scheme
  • Planning to spend no more than £600,000 (with no more than £400,000 on construction)

Maximise your chance of approval with a specialist in the different Government Mortgages Schemes

Get Started Phone Icon 0808 189 2301

First Home scheme

If you’re a first-time buyer looking to buy a new build property, this program was announced in 2020 and offers first-time buyers a discount of up to 30% on their property.

Who is eligible?

Those who can apply for a First Home scheme:

  • Are buying a new build valued at less than the regional price cap
  • Have an income (either combined or sole) below £80,000 if living outside London or £90,000 inside London

Shared Ownership

Open to both first-time buyers and former homeowners struggling to get a mortgage, the Shared Ownership initiative allows applicants to buy between 25% and 75% of a property from a developer or local authority. Rent is then paid on the remaining portion. This model lowers the size of the mortgage you’d need, making it more affordable. You can then aim to buy more of the property over time.

To work out how much you’d pay in rent and mortgage repayments, use our Shared Ownership Calculator below.

Shared Ownership Calculator

Our shared ownership calculator will give you an indication of how much your monthly repayments will be overall, including both for your mortgage and rent. All you have to do is enter details for the property purchase price, interest rate, term length, percentage share and the deposit into the appropriate field.

Enter the value of the property
£
Enter the mortgage rate, 5.5% is a typical rate currently but this can vary
%
Enter the share you're buying as a percentage
%
Share too high
Enter the mortgage term, 25 years is the average but lenders can offer shorter and longer terms
years
Enter the deposit amount here
£
Deposit must be less than property value

Your Results:

Monthly rental payments:

Mortgage repayments:

Total monthly repayments:

Get started with a specialist shared ownership broker who can find the right lender and best possible terms for your circumstances.

Get Started

Who is eligible?

Those who can apply for the Shared Ownership scheme:

  • Are first-time buyers OR former homeowners
  • Earn less than £80k (or £90k in London) per year
  • Have a 5% deposit although some lenders accept no deposit

Right to Buy

This scheme helps those currently living in houses provided by the council in England, Wales and Northern Ireland (not Scotland) to buy that property. Right to Buy homes are usually offered at a reduced rate and sometimes applications are accepted without a deposit.

Who is eligible?

Those who can apply for the Right to Buy scheme:

  • Have rented from the council for over three years
  • Aren’t living in Scotland

You can use our calculator below to work out how much discount you would qualify for through the scheme.

Right to Buy Calculator

Our Right to Buy calculator will tell you how must discount you're eligible for on the purchase price of your property.


Select house or flat
In pound sterling
£
Discounts begin at 3 years

Your Right to Buy discount percentage could be:

Your Right to Buy discount value could be:

The cost of your property after the Right to Buy discount could be:

Now that you've worked out how much discount you're eligible for and know the amount you need to buy your property, your next step should be to seek professional advice if you need a mortgage to foot the cost. We work with brokers who specialise in Right to Buy mortgages, and they're just an enquiry away.

Lifetime Individual Savings Account (LISA)

This is a savings plan rather than an actual mortgage scheme. It’s specifically designed to help people who either want to save a deposit to buy their first home or for someone saving for their retirement.

You can save up to £4,000 per year into a ‘LISA’ and the government will add an extra 25% on top of the amount you save. So, the maximum government contribution would be £1,000 per tax year.

Who is eligible?

Those who can apply for a Lifetime ISA:

  • Must be aged between 18 and 39
  • Must be a resident of the UK (or a servant of the crown if overseas)

Other eligibility factors

Aside from the specific criteria each government scheme has, there will also be criteria set by lenders that you’d have to meet.

Factors they’ll be looking at include:

  • Your earnings and expenditure: Most lenders base how much they’re willing to loan on 4 or 4.5 times an applicant’s income. Any extravagant spending would be a red flag but if your monthly expenditure is within your means that will strengthen your application.
  • Your credit history: It’s possible to get government-backed mortgages with bad credit but the more positive your credit history is, the better your chances of an approval and of obtaining a lower interest rate.
  • Your age: Some lenders won’t offer loans to those over 85 or even 75 but a broker would be able to share details on those who don’t have age caps.
  • Your property type: If the property you’re looking to buy isn’t standard – perhaps it’s a prefab home or a listed building – you may need to apply to a specialist lender.

Which scheme should you choose?

The type of government help you should choose will depend entirely on your circumstances and which schemes you’re eligible for.

Questions you should ask yourself to narrow down the available options include:

  • Are you a first time buyer?
  • Do you want help raising a bigger deposit or need lower monthly repayments?
  • Are you looking to buy a new build?
  • Do you currently live in a council house?

How a broker can help you select the right option

Understanding the various schemes and which might be the right fit can be difficult to do but some brokers spend each day submitting applications to these schemes and corresponding lenders.

Working with one will mean:

  • No wasted time pouring over the details of each scheme. A broker will instantly know which, if any, you qualify for
  • One-to-one guidance through the application process. That’s for both the government scheme application as well as the application to a lender; both of which require substantial paperwork
  • Access to expert advice on the best lender to apply to. Not all lenders will accept government schemes but a broker will know which do and which have the most favourable rates

If you want to get in touch we can arrange for a broker who specialises in government schemes to contact you straight away.

We're so confident in our service, we guarantee it.

We know it's important for you to have complete confidence in our service, and trust that you're getting the best chance of mortgage approval at the best available rate. We guarantee to get your mortgage approved where others can't - or we'll give you £100*

Happy approved couple

Is there government support for people who can’t pay their mortgage?

Yes. When circumstances change and people find themselves struggling to keep up with repayments, there are certain ways in which the government can provide mortgage assistance.

Access to this support will largely depend on your location.

Mortgage Rescue in Wales: In this scheme, the local council or housing association will assess the property in question as well as the homeowners’ finances and may offer to purchase a portion of your home, thus lowering the repayments you’d pay, or purchase the whole property. In this model, you could then stay in the home as a tenant.

Home Owners’ Support Fund: Similar to Mortgage Rescue Wales, this fund, only available in Scotland, supports what’s called the Mortgage Rent Scheme and the Mortgage to Shared Equity Scheme. In the Mortgage Rent Scheme, a landlord would purchase your property and you would rent it from them while the Mortgage to Shared Equity scheme sees the Scottish government purchase up to 30% of the home, leaving you with a smaller mortgage.

Support for Mortgage Interest: Should you lose your job, hit pension age or be receiving income support from the government, this scheme would allow you to take out a loan, with interest, against your home. Rather than monthly repayments, this loan would be paid back when the home is sold at a later date or when you decide to transfer ownership.

Aside from government support, you could also approach a broker for other solutions if you’re struggling to keep up with repayments. They might be able to help work with you to remortgage onto a deal that’s more affordable for you, be it with the same lender or a new one. They could also assist in getting you what’s called a payment holiday. This is where you’d agree with the lender to temporarily reduce or halt repayments for a specific period of time.

Get matched with a broker experienced in government mortgage schemes

Government-backed mortgages help applicants find their feet in the mortgage market but as an additional element of the mortgage process to contend with, they can be stressful to navigate. As such people often opt not to explore them. But with expert help, you can ensure you’re accessing all the financial support you’re eligible for without any second guessing or time wasting.

Certain brokers we work with are experts in these schemes and will be able to share, after a quick and free consultation, what you should be applying for. Getting in touch today will see you matched to a broker who can provide expert government mortgage advice. Call 0808 189 2301 or fill out our enquiry form.

Maximise your chance of approval with a specialist in the different Government Mortgages Schemes

Get Started Phone Icon 0808 189 2301

FAQs

This was part of an initiative aimed at supporting first-time buyers in the UK. Individuals could open a Help to Buy ISA with their bank or building society and when used to buy a property down the line, the government will contribute 25%, at a maximum of £3,000, of any savings in the account.

While individuals can no longer open such ISAs, those who had active ones before the initiative ended will still be able to access the 25% when they choose to purchase.

There aren’t any mortgage schemes specifically aimed for those looking to buy and rent out a property.

While no new schemes have been unveiled, the new government has announced that it plans to build more homes and prioritise infrastructure projects.

Yes, there are a few options available to you outside of the government schemes mentioned above. If you have the support of a senior family member (a parent or grandparent) you could consider either a guarantor mortgage or even a joint borrower sole proprietor mortgage. Both these options would involve your family member offering an element of security in order to support your application.

Ask a quick question

We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different mortgage subjects.

Ask us a question and we'll get the best expert to help.

Our Brokers

Get in touch today

Make an enquiry and we'll arrange for an experienced mortgage broker we work with to contact you straight away.

1 of 3
£
£
£
2 of 3
3 of 3 Send!

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

Continue Reading

Maximise your chances of approval, whatever your situation - Find your perfect mortgage broker

By browsing our site you consent to our use of cookies.