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Help to Buy Mortgages

Help to Buy alternatives

Other schemes and options now that Help to Buy has closed, including shared ownership, First Homes, and 95% LTV mortgages.

2 min readWritten by Saniya Shabir

Now that Help to Buy has shut to new applicants, first-time buyers have to look at other ways onto the property ladder. Here are the main alternatives, and how each one stacks up.

Shared ownership

Shared ownership lets you buy a share of a home, usually somewhere between 25% and 75%, and pay rent to a housing association on the part you do not own. You can use it on new-builds and on resale homes, and there are income caps of £80,000, rising to £90,000 in London. Later on you can buy further shares, a process known as staircasing, until in most cases you own the whole thing.

Shared ownership is not just for first-time buyers, though they do get priority, and that sets it apart from Help to Buy. Your monthly outgoings are a mortgage payment plus rent, which often works out lower than buying outright. Just remember to budget for service charges and the chance that the rent goes up.

First Homes scheme

First Homes sells newly built homes to first-time buyers at a discount of at least 30% off the market price. That discount does not disappear when you move on. It passes to the next buyer too, which keeps the home affordable for local people further down the line.

To qualify, your household income has to be £80,000 or under, or £90,000 in London, and the price after the discount is capped at £250,000, rising to £420,000 in London. Individual councils can layer on their own rules as well, such as a local connection to the area or priority for key workers.

95% LTV mortgages

With a 5% deposit, plenty of lenders will now give you a 95% LTV mortgage with no government scheme attached at all. LTV is loan-to-value, the size of the mortgage measured against the property’s value, so 95% LTV means you borrow 95% and put down the other 5%. The Mortgage Guarantee Scheme widened the choice here, and lenders competing for these buyers have pulled rates down.

For most people this is the cleanest alternative to Help to Buy. You are not tied to new-builds, there are no income caps, and the home is yours in full from day one. Our guide to 95% LTV mortgages goes into more detail. The one trade-off is the rate: borrowing at 95% LTV costs more than borrowing at a lower band, where a bigger deposit buys you a cheaper deal.

Written and reviewed by

Saniya Shabir

Role
Mortgage Adviser
Specialism
Rate Switching & Residential Mortgages
Regulator
FCA register
“Most help to buy cases come down to one thing: the right lender for your circumstances. We’ll find them — and walk you through every step.”
— Saniya Shabir
Get a quoteor call 020 3829 9515

More from Help to Buy Mortgages

Browse all guides

  1. A guide to Help to Buy mortgages

    How the Help to Buy equity loan scheme works, what it costs, and what options you have as an existing borrower.

  2. Repaying your Help to Buy equity loan

    When interest kicks in, how repayment works, and strategies for paying off the government loan.

Ready when you are

That's the help to buy guide. The next step is your situation, your numbers, your circumstances — and that's a conversation. Free, no obligation, take it from there.

Get a quoteor call 020 3829 9515