What was the Help to Build Scheme? How did it work?

At a glance

• The Help to Build equity loan scheme aimed to support first-time buyers and homemovers who wanted to build their own home.
• It was launched on 27 June 2022 and closed to new applications on 31 March 2025.
• While this scheme has ended, it’s still possible to get a self-build mortgage if you want to build your own home.

What was the Help to Build scheme?

The Help to Build equity loan scheme was announced by the Government in April 2021. It said the scheme, which launched in 2022, would provide £150m in the form of loans to those wanting to get a self-build mortgage.

Individuals, including first-time buyers and those moving home, could apply for this scheme until 31 March 2025.

The scheme aimed to make it more affordable to build your own home. The Government stated that borrowers typically needed to fund around 25% of the total land and building costs themselves when building their own home, but this scheme would allow them to pursue this option with just a 5% deposit.

The equity loan could cover between 5% and 20% of the total estimated land and building cost (or up to 40% in London).

Borrowers then needed to apply for a self-build mortgage from a lender registered with the Help to Build scheme to cover the rest of the cost.

Once the house was built, the scheme paid the Help to Build equity loan to the mortgage lender. The homeowner would then be switched to a repayment mortgage (after the lender had conducted the necessary checks), which would need to be in place until the equity loan was paid off in full.

There are similar schemes in Wales and Scotland that are still available and can help with the costs of building your own home. There are no such schemes in Northern Ireland.

Who could get a Help to Build equity loan?

To be eligible for the loan, borrowers needed to be aged 18 or over, have the right to live in England and intend to live in the property as their only home. Moreover, they needed to be able to get a self-build mortgage from a lender that was registered with the scheme.

Some of the projects the loan could be used for included:

• building a new home
• buying a plot of land to build on
• converting a commercial property to a residential home.

It couldn’t be used to upgrade an existing home or to build a second home.

The estimated cost of the building project couldn’t be more than £600,000 (if you needed to buy a plot of land and build your home).

If you wanted to build on land you already owned, the estimated cost couldn’t be more than £400,000.

Repaying a Help to Build equity loan

Help to Build equity loans typically have terms of 25 years, after which you need to repay the loan in full. If you sell your home or repay your mortgage in full before the end of the term, you will need to repay the loan at this point.

It’s possible to partially or fully repay the loan at any point. Bear in mind that, because the equity loan is a percentage of your property’s market value, the amount you owe could fluctuate depending on how its value changes.

The loan is interest-free for the first five years, then interest is charged at 1.75% in the sixth year. The interest rate subsequently increases each year by the rate of the Consumer Price Index (CPI) plus 2%. You will need to make the interest payments each month.

A monthly management fee of £1 also applies for the duration of the equity loan.

For more information on the Help to Build equity loan, see the Government website.

Self-build mortgages

Even though the above scheme has finished, borrowers can still apply for a self-build mortgage.

One of the key features of a self-build mortgage is that the lender can release the money in stages, when you buy the land, complete the foundations and reach other points in the construction process, for example.

This means you are only charged interest on the sums you’ve drawn from, instead of borrowing the whole amount up front and then starting to incur interest on the whole balance from day one.

Furthermore, many self-build mortgages are interest-only while the property is being built.

It’s important to do your own research before starting your self-build project. Furthermore, it’s a good idea to speak to a mortgage broker and get professional advice to help ensure you get the right form of funding for your situation.

Learn more about self-build mortgages

Find out more information about these specialist mortgages and compare the latest deals available on our self-build mortgages chart.