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Help to Buy mortgage guarantee scheme

This content applies to England

The Help to Buy mortgage guarantee scheme launched in October 2013 to help people to buy a newly built or existing home on an outright ownership basis with only a five per cent deposit. From February 2014 the scheme was amended to cover Home Purchase Plans, often known as ‘Islamic mortgages'. The scheme closed to new customers on 31 December 2016.

The scheme provides a government-backed mortgage guarantee to lenders.

How the scheme works

Under the Help to Buy mortgage guarantee scheme, the government provides participating lenders with a guarantee of up to 15 per cent of the property’s value. This enables lenders to provide mortgages with a higher loan to value ratio than they might otherwise offer, because they are protected from losses up to the guaranteed amount if the purchaser defaults on their mortgage payments and the lender has to repossess and sell the property for less than its original value.

The Help to Buy mortgage guarantee scheme allows people to buy a property anywhere in the UK of up to £600,000 in value with a deposit of only five per cent of the purchase price. It is aimed at first time buyers and movers who cannot afford to pay a large deposit in order to buy a home.

Unlike the Help to Buy equity loan scheme, which can only be used to buy new build property, the Help to Buy mortgage guarantee scheme applies to both new build and already existing property. See the page Help to Buy equity loan scheme for more information on buying with an equity loan.

A person who purchases under the scheme becomes an outright owner of the property – the scheme is not available for buying on a shared ownership basis (for shared ownership schemes, see the page Help to Buy shared ownership, or for shared ownership for social housing tenants see Social HomeBuy).

Only repayment mortgages are offered under the scheme, not interest-only or self-certified mortgages.

'Islamic mortgages'

From 11 February 2014, the Help to Buy mortgage guarantee scheme rules were amended so that banks that sell Home Purchase Plans (HPPs), or 'Islamic mortgages', can purchase a government guarantee for them.

In order to purchase the government guarantee, banks will have to satisfy the same criteria for an HPP as for other mortgages authorised by the scheme. For the rules, see below under Further information.

Who can apply

Both first-time buyers and movers can apply to buy under the mortgage guarantee scheme.

There is no limit on the prospective buyer’s income, but s/he must not already own a home and cannot rent the property out after s/he has bought it.

Mortgages under the scheme will not be available to people with a history of difficulties with debt.

How to apply

From 7 October 2013, prospective buyers under the scheme need to apply directly to the lenders participating in the scheme. Information on participating lenders can be found from The government’s guarantee will be in place from January 2014, after which time borrowers will be able to complete on their mortgage.

Further information

The Help to Buy mortgage and Home Purchase Plan (HPP) guarantee schemes will be available up to the end of December 2016.

For more information about the rules applying to participating lenders for both the mortgage and the Home Purchase Plan guarantee schemes, see Help to Buy: mortgage and HPP guarantee scheme rules.


The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

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