Why location is a vital key when it comes to securing your ‘help-to-buy’

IT IS not just property prices that vary around the country. Mortgage deals and rates can change dramatically as well. The odds of a struggling first-time buyer getting a good ‘help-to-buy’ mortgage are different in England, Scotland, Wales and Northern Ireland – and so are the terms on offer.

The regional variations make it even harder to be sure you are getting the best possible mortgage – and may freeze some hopeful buyers out of the property market altogether. Here are the key local differences to watch out for: IN THEORY everyone should have access to two types of ‘help-to-buy’ mortgage.

The first is the equity loan for newbuild properties where you put down a 5 per cent deposit and the Government tops it up with a low interest loan for 20 per cent of your purchase price.

When this is done, armed with a 25 per cent deposit, you get a mortgage for the remaining 75 per cent of the home’s value. Most lenders will consider an application under this scheme. The second type of help-to-buy is the mortgage guarantee scheme for existing or new homes.

With this you again put down a deposit of as little as 5 per cent. Then you borrow the remaining 95 per cent from one of a dozen or so lenders. The lender promises to offer lower than normal interest rates because it is accepting that a Government subsidy will protect it against any arrears or defaults.

In reality both types of deals vary around the country. You can get more information by searching for ‘affordable home ownership schemes’ at www.gov.uk.

ENGLAND

YOU can borrow to buy homes worth up to £600,000 on both schemes – which are expected to be on offer until 2020. Most lenders help with equity loan deals.

If you want a mortgage guarantee deal in England then you can go to big lenders including Barclays, Halifax, NatWest, Nationwide Building Society and Santander as well as several smaller building societies.

SCOTLAND

IN SCOTLAND first-time buyers get less support. The maximum property value for equity loans is £250,000 – and by May this year, the Scottish government had allocated all the money reserved for the scheme.

The government is on the point of releasing a new tranche of money though critics say it could run out fast, so anyone hoping for a help-to-buy equity loan in Scotland will have to apply early to take advantage.

If you are buying an existing home then mortgage guarantee loans are still on offer in Scotland and you can get one from any of eight lenders. They are: Barclays, Glasgow Credit Union, Lloyds Bank, Scotwest Credit Union, Virgin Money and building societies Leeds, Nationwide and Skipton.

WALES

IN WALES the maximum property price for an equity loan is £300,000. New money means the scheme will continue beyond its scheduled end date of April next year. The repayment details are slightly different on the Welsh scheme with a nominal monthly payment of £1 charged on the equity loan for the first five years.

You can get mortgage guarantee loans from a dozen lenders including banks such as Barclays and building societies Chorley, Leeds, Mansfield, Nationwide, Monmouthshire, Principality, Swansea and Teachers. In Wales there are other local schemes to consider if you are struggling to buy – the main ones are Rent First, Homebuy and Homes Within Reach.

NORTHERN IRELAND

IN NORTHERN IRELAND you can buy a home using a similar mortgage guarantee scheme. As well as the usual big name lenders, other providers are Ulster Bank and Bank of Scotland. Equity loans are not on offer but there is a unique ‘co-ownership’ scheme that lets you buy a share of any home, and then ‘staircase’ to buy more of it if your income rises in the future.

It is similar to shared ownership in other parts of the UK, though it is not limited to housing association homes as it is elsewhere.