How did Help to Buy work? How Your First Home differs

How does Help to Buy work, and does it still exist?

Help to Buy was the government equity loan scheme that ran in England from April 2013 to March 2023. It worked like this: you bought a new-build home with a 5% deposit, the government lent you 20% of the price (40% in London from 2016), and a mortgage covered the rest. The loan was interest-free for five years, then charged 1.75% of the amount borrowed in year six, rising each year after that, and it was repaid as the same percentage of the home’s value when you sold, remortgaged to clear it, or reached the end of the 25-year term (GOV.UK).

It is closed. Applications ended in October 2022 and the final completions happened in March 2023; GOV.UK says plainly that you can no longer apply. If you are searching for how Help to Buy works because you want to use it, the answer in 2026 is that you cannot, and the scheme to look at instead is Your First Home, announced on 26 September 2026 (GOV.UK). If you already have a Help to Buy loan, nothing about it changes.

Help to Buy vs Your First Home, side by side

Sources: GOV.UK Help to Buy homebuyers’ guide, GOV.UK interest guidance, GOV.UK Your First Home announcement, BBC News.

What the smaller deposit changes

Halving the deposit is the headline. On the £230,000 example used in reports of the announcement, Help to Buy needed £11,500 up front and Your First Home needs £5,750. The mortgage is bigger as a result: 77.5% of the price rather than 75%, so £178,250 rather than £172,500, which at 5% over 25 years is about £34 a month more. In exchange the buyer needs almost £6,000 less in savings, which for the people the scheme is aimed at, those without family money, is the difference between buying and not buying. The calculator shows both figures at any price.

What the income cap and developer levy change

Help to Buy had no income cap, and its evaluation found that 54% of buyers said they could have bought without it (GOV.UK evaluation). We read the income cap as the government’s answer to that; the release itself says only that the cap is “to further ensure support is targeted at those who need it”. The level is not set; the nearest comparisons, First Homes and Shared Ownership, use £80,000 a year (£90,000 in London), as the income cap page explains.

The developer contribution is new. Under Help to Buy, housebuilders received full price for every home and paid nothing towards the scheme. Under Your First Home they “will be expected to make a contribution when signing up” (GOV.UK). The Conservatives argue this levy risks pushing up the price of new homes; the Home Builders Federation has welcomed the scheme (BBC). Whether developers absorb the cost or pass it on is the question that matters most to buyers, and nobody can answer it before the Budget.

What Help to Buy’s evaluation found

The government published its evaluation of Help to Buy on 16 September 2026, ten days before announcing the replacement. The findings that should shape how you think about Your First Home (GOV.UK):

• 387,000 homes were bought through the scheme, 328,000 of them by first-time buyers, with £24.7 billion of equity loans.
• 46% of buyers said they could not have bought without it; 54% said they could.
• Around 15% of new builds in England built between 2013 and 2023 were the result of the scheme.
• Buyers paid about 5% more for a new build than for a similar second-hand home, and about 1% more again for a Help to Buy home.
• On the English side of the border with Wales, prices ran around 2% higher than they would have otherwise during the first version of the scheme.
• The scheme “had little effect on FTB [first-time buyer] mortgage sales in more expensive areas”, where deposits were already high.
• 71% of customers were satisfied with their experience of using the scheme (and 86% with their property), but there was “some dissatisfaction with the redemption process and confusion surrounding the equity loan repayment aspect”.

That last point is why this site has a whole page on repaying the equity loan. The confusion was about repaying a share of value rather than a sum of money, and Your First Home uses the same rule.

What has not changed

The equity loan itself. You still repay 20% of whatever the home is worth, not the pounds you borrowed. A £46,000 loan on a £230,000 home becomes £57,500 if the home is worth £287,500 when you sell. Interest, when it starts, still does not reduce the loan. And under Help to Buy you could only repay in chunks of 10% of the value or more, after a surveyor’s valuation and a £200 fee (GOV.UK). Every one of these rules is an assumption for Your First Home until 28 October 2026; the calculator badges them as assumed and the methodology page lists each one.

If you have a Help to Buy loan now

Your terms are unchanged. Interest started or starts in year six, rising every April; you can repay in part or in full after a valuation; you must repay in full when you sell or at the end of the term. The repayment page explains the routes, with links to the GOV.UK guidance for each, and the equity loan calculator works out what you would owe at any value.