The best Help to Buy mortgages
The Help to Buy scheme is the Government's latest idea to help the housing market get moving and allow those with small deposits to get onto the property ladder.
It consists of two main parts.
First was the Help to Buy: equity loan offering, which launched earlier this year. It's only available on new-build properties and consists of a Government loan worth up to 20% of the value of the property, which you combine with at least a 5% deposit you have saved up yourself. You then get a special Help to Buy mortgage from one of the participating lenders, which makes up the rest of the value of the property. So if you get a 20% equity loan, the mortgage will be for 75% loan-to-value (LTV).
In England the scheme is available on properties worth up to £600,000, while in Scotland it's capped at £400,000. The equity loan is interest free for at least five years, depending on which country you live in. For more read Help to Buy mortgages explained.
The second part of Help to Buy, the mortgage guarantee, was due to launch in January 2014 but has been brought forward. Again, you just need a 5% deposit, but the Government acts as a 'guarantor' on the mortgage. The mortgage lender is charged an insurance fee for this guarantee, which is then built into the cost of the mortgage that you pay.
Let's take a look at which lenders are taking part in each of the Help to Buy segments and what the rates look like.
For borrowers who want to take advantage of the Help to Buy: equity loan scheme, there are two choices. You can take a two-year fixed rate at 3.15% or a five-year fixed rate at 3.65%. Both mortgages are fee free, available up to 75% LTV.
For phase two of Help to Buy, there are again two options, which once again come without any fees to pay. There is a two-year fixed rate at 4.99% and a five-year fixed rate at 5.49%.
Royal Bank of Scotland
Royal Bank of Scotland is offering an identical suite of mortgages to NatWest. So for the equity loan scheme, there's a two-year fixed rate 3.15% or a five-year fixed rate at 3.65%.
And for the mortgage guarantee portion, there are two 95% mortgages available, a two-year fix at 4.99% and a five-year fix at 5.49%.
All of these deals are fee free.
Halifax and Bank of Scotland
For Help to Buy equity loan mortgages, Halifax is just offering a two-year fixed rate mortgage, though the rate on offer changes depending on the LTV you go for. For mortgages of 60%-75% LTV the rate is 2.94%, for 75%-80% LTV the rate is 3.69% and for 80%-90% LTV the rate is 5.09%.
All come with a £999 fee.
For phase two of Help to Buy, where mortgages are offered at 95% LTV, we so far only have details of one mortgage. It's a two-year fixed rate, priced at 5.19% and with a fee of £995.
Details on further mortgages will be released in due course.
Santander is currently only taking part in the equity loan part of the Help to Buy scheme, where it will lend up to 75% of the property's value.
It has three mortgages available at the moment, all of which come without a booking fee.
There is a two-year fixed rate at 3.24%, a five-year fixed rate at 3.44% and a two-year tracker rate at bank base rate plus 2.74% (meaning a current interest rate of 3.24%).
It's announced that it will be joining the mortgage guarantee scheme in January.
Like Santander, Nationwide is currently only participating in the equity loan segment of the scheme.
All of its mortgages from 75% LTV up can be used for Help to Buy, but for the sake of brevity we'll just look at the 75% options here. It offers two versions of each mortgage type, one fee-free and one with a £900 fee. However, that fee falls to £400 if you're a first-time buyer. And any existing borrower can get a 0.1% discount on the deals on offer.
If you're happy to pay a fee, there's a two-year fixed rate at 2.34%, a three-year fixed rate at 2.64% and a five-year fixed rate at 3.34%. For those who want a variable rate, there's a two-year tracker at base rate plus 1.84% (current rate 2.34%) and a three-year tracker at base rate plus 1.94% (current rate 2.44%)
For fee-free borrowers, the two-year fix jumps to 2.74%, the three-year fix moves to 2.94% and the five-year fix rises to 3.54%. Meanwhile, both the two-year and three-year trackers are charged at base rate plus 2.79% (current rate 3.29%).
Just to add even more choice, if you hold a Nationwide FlexAccount, you can get your hands on two exclusive mortgages. There's a four-year fixed rate at 2.94% (3.24% for the fee-free version) and a five-year tracker at base rate plus 2.54%, which comes with no mortgage fee.
Barclays is another lender only taking part in the equity loan part. It has just one mortgage available, a three-year fixed rate at 3.19% which comes without a fee to pay.
Aldermore, Virgin Money, HSBC and Santander
A number of lenders have said they will be taking part in phase two, but are yet to publish any details on the mortgages they will be offering.
Aldermore and HSBC hope to launch mortgages this year, while Virgin Money and Santander say they will have their deals in place from January.
Can you pay less for your mortgage? See the latest rates