Help to Buy Wales: Eligibility, Repayment, and How the Equity Loan Works

England closed its Help to Buy scheme in March 2023. Wales kept its version running — and then extended it again. For first-time buyers who cannot stretch to a 10% deposit but have enough income to service a mortgage, Help to Buy – Wales remains the most powerful tool available in the Welsh property market. Understanding exactly how it works, what it costs long-term, and what catches buyers out is essential before you commit.

What Help to Buy Wales Actually Is

Help to Buy – Wales is a shared equity loan scheme administered by the Welsh Government. It is not a grant, and it is not free money. The Welsh Government takes an equity stake in your home, proportional to the loan it provides. When you eventually sell or repay the loan, you repay that same percentage of whatever the property is then worth — not the original loan amount.

The mechanics work like this: you provide a minimum 5% personal deposit. You then secure a standard repayment mortgage for up to 75% of the purchase price from a qualifying lender. The Welsh Government bridges the remaining gap with a shared equity loan of between 10% and 20% of the purchase price. Combining your deposit, the mortgage, and the equity loan gets you to 100% of the property value.

Since the scheme's launch in 2014, it has supported more than 14,000 households into homeownership across Wales. The most recent quarterly data shows that the mean purchase price through the scheme is around £269,000, with a mean equity loan of approximately £53,000 — indicating this is predominantly used by mid-income buyers purchasing three and four-bedroom family homes rather than entry-level flats.

The scheme was extended in December 2024 by the Cabinet Secretary for Housing and Local Government for a further 18 months, with new applications currently accepted through September 2026 and legal completions permitted until June 2027.

Eligibility Rules

The eligibility requirements are tighter than most buyers initially assume:

Property type and price cap. The scheme is restricted entirely to new-build properties. It cannot be used on existing homes. The maximum purchase price is £300,000 — anything above that is ineligible regardless of how much equity loan you request.

Developer registration. Not every new-build development qualifies. The property must be constructed by a developer formally registered with Help to Buy – Wales. Approximately 50 developers and SMEs are currently registered. Before falling in love with a particular development, confirm with the sales office that the developer is on the scheme.

Owner-occupation only. You must use the property as your sole main residence. Sub-letting any part of the property is strictly prohibited. You cannot own any other residential property at the time of purchase.

Mortgage type. Only repayment mortgages are eligible. Interest-only mortgages are not permitted under the scheme.

EPC and broadband requirements. All eligible properties must achieve a minimum Energy Performance Certificate rating of B. The property must also be verified as ready for high-speed broadband connection. These requirements reflect the Welsh Government's sustainability agenda and mean older, lower-rated new builds do not qualify.

Financial vetting. Buyers must be assessed by an Independent Financial Advisor (IFA) and are required to pay a fully refundable £500 reservation fee to the builder before progressing.

There is no income cap under Help to Buy – Wales, which distinguishes it from Shared Ownership and Homebuy, both of which require household income of £60,000 or less.

The Repayment Schedule: When the Interest Kicks In

The equity loan is completely interest-free for the first five years. You pay only a nominal management fee of £1 per month during this period. This gives a meaningful cash-flow advantage in the early years of homeownership when other costs — furniture, maintenance, establishing your household — tend to be highest.

From year six, a 1.75% annual interest charge is applied to the outstanding equity loan balance. This is not applied to the original loan amount — it is applied to the current market value of the equity stake, which is recalculated periodically.

From year seven onwards, the rate escalates annually. The calculation is: previous year's rate of 1.75%, plus any increase in the Consumer Price Index (CPI), plus an additional 2%. In a high-inflation environment, this escalator creates a genuinely significant cost that buyers must model carefully before committing.

Consider a buyer who takes a 20% equity loan on a £260,000 property — a £52,000 loan. If the property appreciates to £310,000 by year six and the equity stake remains at 20%, the interest charge is calculated on £62,000, not on the original £52,000. The interest does not compound on a fixed sum; it tracks the property's rising value.

This is why financial planning beyond the five-year honeymoon period is critical. Buyers who intend to repay the equity loan by year five — typically by remortgaging to a higher loan-to-value mortgage and using the released equity to buy out the Welsh Government stake — pay no interest at all. Those who carry the loan into year six and beyond will see the cost of the equity stake increase over time.

Applying and What to Expect

The process starts with the developer. Once you have identified a qualifying new-build and confirmed the development is registered with Help to Buy – Wales, you pay the £500 reservation fee to secure the plot. This fee is fully refundable if your application is rejected.

You are then required to engage an IFA to assess your affordability. The IFA verifies that you need the equity loan — that you could not purchase the property on the open market without the Welsh Government's contribution. The scheme is intended to assist buyers who have sufficient income but insufficient deposit, not to provide a windfall to those who could finance without it.

Once approved, your conveyancing solicitor handles the legal mechanics of the equity loan alongside the main mortgage. The Welsh Government's equity stake is registered as a second charge on the property at HM Land Registry, meaning the equity loan sits behind your primary mortgage in terms of priority.

If you are relying on a parent to help with affordability — as a Joint Borrower Sole Proprietor arrangement, for example — it is important to structure this carefully. If a parent who already owns a property is placed on the title, the entire transaction attracts the higher Land Transaction Tax rate (an additional 4% surcharge), which can add thousands of pounds to your upfront costs. A JBSP arrangement keeps the parent on the mortgage but off the title, avoiding this trigger.

What the Scheme Does Not Cover

Help to Buy – Wales is explicitly designed for new-builds in Wales only. It does not apply to existing properties, which is why buyers interested in older homes or rural properties should look at Homebuy Wales instead.

Part-exchange deals are also excluded. If you are looking to use an existing property as part of the purchase, this scheme cannot be combined with a part-exchange arrangement.

For those who missed the new-build market entirely, or whose budget does not align with registered developments in their preferred area, the Wales First-Time Buyer Guide covers the full range of Welsh Government schemes alongside the complete buying process — from LTT calculations to conveyancing timelines.

Is Help to Buy Wales Right for You?

The scheme makes most financial sense if you plan to build equity quickly, remortgage before year six to release cash for the equity loan repayment, and move on within a decade. In that scenario, you pay zero interest on the government loan and effectively borrowed the equity stake for free.

It makes less sense if you plan to stay in the property long-term without ever making additional equity loan repayments, particularly in a rising market where the escalating interest on an ever-larger equity stake can become a meaningful ongoing cost.

The scheme also concentrates your options on new-build developments. New builds typically carry a "new build premium" — they are often priced above equivalent second-hand properties in the same area. Once that premium erodes in the first few years of ownership, buyers can sometimes find their property is worth less than they paid, temporarily reducing the equity available for remortgage.

For buyers who meet the eligibility criteria, are purchasing within the £300,000 cap, and have a clear plan for the equity loan — Help to Buy – Wales is genuinely useful. For buyers who fall outside those parameters, Shared Ownership, Homebuy, or a conventional purchase with careful LTT planning may be a better fit.

The Wales First-Time Buyer Guide walks through all of these options in detail, including worked examples comparing the total cost of each route over a ten-year period.

See more Wales guides →