Help To Buy 2 – How Does It Work?

This scheme gives the ability to buy a house with just a 5% deposit.

This second phase of Help to Buy is open to all properties, old and newly-built, provided it costs less than £600,000 and is available to first time buyers and home movers. Borrowers who match the criteria will be offered a loan of up to 95pc of the property’s value.

It is not available to remortgages, Buy to Let, second homes, shared equity/shared ownership, Right to Buy and Guarantors.  Applicants must not own or have an interest in any other property, wherever situated (UK or overseas) or whether mortgaged or unencumbered.

This second scheme works by the Government underwriting 15% of the purchase price but not physically paying any money to reduce the borrowing.  This means the Government only repaying lenders’ losses if the property was repossessed during the first 7 years.


Purchase price £200,000
5% deposit from yourself £10,000
Your borrowing £190,000
15% Government guarantee £30,000

Your payments will be based on borrowing £190,000 but the risk to the lender is only £160,000.

Based on this reduced risk, new mortgage products have been launched.

As this is brand new scheme there are only a few lenders with products available with more being launched in the new year.

Natwest / RBS / HSBC / Aldermore / Virgin / Lloyds Banking Group.

We have listed below an example rate from Natwest / RBS

  • 2 year fixed rate
  • No product fee
  • 4.99% fixed until 31/12/2015
  • 4.00% variable rate thereafter
  • 4.30% APR is the overall cost for comparison
  • Early repayment charges apply until 31/12/2015

As Help to Buy has just been launched  and as new lenders will be joining in the new year, it might be worth waiting until the market has stabilised before taking advantage of this scheme.

Contact us today for a free no obligation initial discussion or meeting

Why Use Neil Soundy Financial Services For Your Mortgage Advice?

  • We are experts in SPV / Ltd Co lending.
  • Your initial consultation is free with no obligation

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How Much Will It Cost Me For Your Advice?

A fee of £495 is payable on completion of the mortgage and Neil Soundy Financial Services Ltd will keep the commission received from the lender for arranging the mortgage.

Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

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