Help to Buy Wales

Posted 30 December 2015 by Amber Warby

What is the Help to Buy Wales scheme and how does it work?

Help to Buy Wales is very similar to the terms of Help to Buy England, except the housing price has to be below £300,000 to qualify for the equity loan. The government will offer a 20% equity loan, of the property value on a five-year interest-free basis. The new homeowner would have to put down just 5% as a deposit, in order to secure the new property.

With 25% of the property covered, you will have to take out a repayments mortgage to cover the remaining 75% of the value, of which you will be means-tested to ensure that you’re in the financial position to repay this.

​After the first five years, there is an interest fee of 1.75% of the property price at that time, increasing in line with the Retail Prices Index plus 1%, that will be added to your monthly repayments of the loan. The Help to Buy loan lasts 25 years maximum. If you choose to sell your property before this period, the government should receive 20% of the sold property price.

As long as the housebuilder is registered with the Help to Buy scheme, all Welsh residents can apply for a new home under the scheme, whether you are a first-time buyers or current homeowners. It is important that this new build is the only property that you will own and that it is not bought under the pretence of Buy to Let.

Working example

Property price £150,000 (100%)
Initial deposit £7,500    (5%)
Equity loan     £30,000    (20%)
Remaining mortgage  £112,500    (75%)

There are a large number of housebuilders taking part in the scheme. Some of the mortgage lenders participating in the scheme are:
Barclays Bank Plc
Lloyds Banking Group
Monmouthshire Building Society
Nationwide Building Society
Principality Building Society
TSB
Virgin Money

 
A full list of participating housebuilders and lenders can be found on the Welsh Government's Help to Buy website.

In a step-by-step explanation, the process of buying through Help to Buy Wales is as follows:

  1. Search for a new home from a participating housebuilder
  2. Submit your application to Help to Buy Wales
  3. Make a reservation on the property you want
  4. Apply for a mortgage
  5. Exchange contracts, transfer funds and complete the sale


Useful links

Search Help to Buy

What is a Help to Buy ISA? 

The buying process Q&A 

Two-year or five-year fixed-rate mortgage?

10 mortgage questions to ask 

Repaying your Help to Buy equity loan 

How to use your equity to help your kids buy a new home&nbnbsp;

What you should teach your kids about mortgages and borrowing

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