Credit Building > Can I Still Get the Help to Buy Equity Loan?

Can I Still Get the Help to Buy Equity Loan?

Wollit Team3 minute read · Updated 21st March 2025

Can I Still Get the Help to Buy Equity Loan?

If you're wondering whether you can still get the Help to Buy equity loan, the short answer is no. The Help to Buy equity loan scheme is no longer available to new applicants in England or Wales. The scheme closed to new applications in England in October 2022, marking the end of this popular government initiative designed to help first-time buyers get onto the property ladder.

What was the Help to Buy equity loan scheme?

The Help to Buy equity loan was a government initiative that provided first-time buyers with an equity loan of up to 20% (40% in London) of a new-build property's value. This loan was interest-free for the first five years, allowing buyers to purchase a home with just a 5% deposit and a mortgage for the remaining 75% (or 55% in London).

The scheme was specifically designed for new-build properties and aimed to make homeownership more accessible while stimulating housing construction. During its operational period, it helped thousands of first-time buyers who struggled to save large deposits.

When did the Help to Buy equity loan scheme end?

The Help to Buy equity loan scheme officially closed to new applications in England in October 2022. The Welsh version of the scheme has also ended. This closure was planned and announced well in advance, giving potential homebuyers time to submit their applications before the deadline.

If you're seeking homebuying assistance now, you'll need to explore alternative schemes such as Shared Ownership or the First Homes scheme.

Information for existing Help to Buy equity loan holders

If you already have a Help to Buy equity loan, it's important to understand how to manage it effectively:

Interest payments

Your equity loan remains interest-free for the first five years. After this period, you'll start paying interest at an initial rate of 1.75%, which increases annually by the Consumer Price Index (CPI) plus 2%. These increasing costs should be factored into your long-term financial planning.

Many homeowners are caught off guard when interest payments begin, so preparing in advance is crucial. Setting up a direct debit for these payments can help ensure you never miss them.

Repayment terms

The loan must be repaid in full within 25 years or when you sell your property, whichever comes first. The repayment amount is calculated as the same percentage of the property's current market value as you initially borrowed, not the original cash amount.

For example, if you borrowed 20% of your property's value and its value has increased when you sell, you'll repay 20% of the higher value. Conversely, if the value has decreased, you'll repay 20% of the lower value.

Partial repayments

You can make partial repayments (staircasing) of your equity loan, but these must be at least 10% of your property's current market value. Reducing your loan this way can lower future interest payments and decrease the amount you'll need to repay when you sell.

Before making partial repayments, you'll need to have your property professionally valued, which incurs a fee. Additional administrative fees may also apply.

Managing your equity loan

Existing Help to Buy equity loan holders can manage their equity loan through official government channels. Target, the Help to Buy administrator, handles queries and administrative processes for existing loans.

Having a good credit score remains important for those looking to remortgage in the future. Building your credit history with tools like a Wollit credit builder can improve your chances of securing favorable terms when you eventually remortgage or move to a new property.

Remortgaging with a Help to Buy equity loan

When your initial mortgage deal ends, you might consider remortgaging. You have several options:

Remortgage your existing mortgage portion while keeping the equity loan
Remortgage to raise additional funds to repay part or all of the equity loan
Sell the property and repay both the mortgage and equity loan

Each option has different implications based on your financial situation and property value. Seeking professional financial advice before making these decisions is highly recommended.

Alternatives to the Help to Buy equity loan

With the Help to Buy equity loan no longer available, first-time buyers should explore these alternatives:

Shared Ownership: Purchase a share of a property (between 25% and 75%) and pay rent on the remainder.
First Homes scheme: Offers discounts of at least 30% on market value for first-time buyers and key workers.
Mortgage guarantee scheme: Helps buyers access 95% mortgages with a 5% deposit.
Lifetime ISA: A savings account with a 25% government bonus (up to £1,000 annually) for first-time buyers.

Understanding how your credit score affects homebuying is essential when considering these alternative schemes, as most will require mortgage approval.

While you can no longer apply for a Help to Buy equity loan, existing holders should focus on managing their loans effectively, while prospective homebuyers should research alternative support schemes to help them achieve their homeownership goals.