Help to Buy Mortgages Are Now Being Extended Beyond 25 Years

In an update to shared ownership schemes, first-time buyers are now able to take out mortgages which last longer than 25 years.

As of the end of August 2019, when first-time buyers come to remortgage after their two or five year fixed rate period, they can now apply for Help to Buy mortgages of up to 35 years since the Ministry of Housing, Communities and Local Government lifted the barrier restrictions.

Furthermore, the segment size required for ‘staircasing’ is being reduced, meaning those under the scheme can now increase their share of the property in increments of 1%, rather than the previous 10% minimum.

Homes England Director of Help to Buy, says:

“Lenders told us our agreement to match or extend our equity loan to the main mortgage loan term was critical to giving them the confidence to offer re-mortgage products to Help to Buy customers.

“Under our new policy, if the customers’ remortgage runs for longer than the standard 25-year Help to Buy: Equity Loan term, then we will automatically extend ours.

“This move opens up the Help to Buy remortgage market to more lenders. It offers more choice, more options and better outcomes for these customers.”

Trade Association UK Finance worked alongside Homes England on developing this new policy. Its Director of Mortgages, Jackie Bennett, added:

“The new changes provide certainty for lenders and should also attract new entrants to the market, providing greater choice for customers who are looking to remortgage under the Help to Buy Scheme.

“This is a great example of public and private sector engagement and we look forward to continuing to work closely with Homes England in the months ahead.”

What Does This Mean for You?

This Help to Buy extension will allow homeowners to purchase additional shares in their property and will hopefully encourage more people (and lenders) into the market by providing more affordable housing. This longer period will also allow mortgage holders to spread out repayments over a longer period, therefore reducing monthly repayments, and making meeting affordability requirements of lenders easier.

The government argues this will also build local support for new development, something that professionals are sure to like the sound of.

What Are Your Finance Options?

Whether you’re considering building properties for Help to Buy purchasers or any other buyer, if you require development finance, our team of professional brokers can help.

Alternatively, if you’re looking to get onto the property ladder, Ignite Property Finance can support you in applying for a Help to Buy mortgage.