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What is the Help to Build equity loan scheme and how can I apply?

Ever dreamed of building your own home but are worried about the cost? The UK government’s Help to Build equity loan scheme may be able to offer vital support by helping to fund your self-built home. 

We reveal what you need to know about the Help to Buy equity loan scheme, including how it works, eligibility and the pros and cons. 


  • Building your home can be expensive, but the Help to Build scheme can offer support. 

  • You can get an equity loan with a 5% deposit so you can build your own dream home.  

  • It’s worth talking to a mortgage broker via Unbiased to find out whether the scheme is right for you and to help you find the best mortgage for your unique circumstances. 

What is the Help to Build scheme? 

With the Help to Build scheme, you can get an equity loan with only a 5% deposit (of the estimated land and build costs), so you can build your own home to your specifications in a location of your choice.  

This scheme is available in England only. There are separate schemes for those looking to build their home in Scotland or Wales.  

While the Help to Build scheme helps people build their own homes, the loan can be used to: 

  • Buy the land where you want to develop. 

  • Build an ‘airspace development’ flat (new properties built in unused space above an existing building). 

  • Convert a commercial property into a residential one. 

  • Customise a shell build (a professional builds the structure and you design the interior). 

  • Demolish an existing property and replace it with a new one. 

The loan cannot be used to build more than one home, renovate or upgrade your current home or build a second property. 

The equity loan you’ll receive will be based on the estimated costs to buy the land and build your property and will be between 5% and 20% of the overall expected cost. 

If you’re building your own home in London, you can get an equity loan covering up to 40% of the total estimated cost. 

The loan is interest-free for the first five years and can help you get a cheaper mortgage. 

How does the Help to Build scheme work? 

As mentioned, if your application for the Help to Build scheme is successful, you can get a loan worth up to 20% of your overall costs (or up to 40% if you’re building property in London). 

You can spend up to £600,000 on your new home if you’re also buying the land, but you cannot spend more than £400,000 on building it.  

If you already own the land, your expected costs of building your home cannot exceed £400,000.  

For the first five years, your loan is interest-free, although you’ll pay a £1 monthly management fee, which will remain for the lifetime of your loan.  

In the sixth year of your loan, you’ll be charged interest at a rate of 1.75% and the £1 monthly fee. After this, the amount of interest you’ll pay will change on an annual basis. 

So, you’ll pay the rate of inflation from the Consumer Price Index (CPI) from the previous September, plus 2%.  

For example, if your rate were based on September 2023’s CPI reading (6.7%), you would have to pay a rate of 8.7%. 

It’s worth stressing that changes in your property’s value can impact how much you owe – so it’ll increase if your home increases in value and vice versa.  

What’s the eligibility for the Help to Build scheme? 

You can apply for the Help to Build scheme if you: 

  • Are at least 18 years old and can legally live in England. 

  • Plan to live in your self-built home. 

  • Get a self-build mortgage from a lender registered with the Help to Build scheme. 

  • Have at least a 5% deposit of the overall estimated cost of the land and build. 

You won’t be able to apply to the Help to Build scheme if you’ve had an equity loan in the last two years or owe money to another government home ownership scheme.  

Also, you don’t have to apply solo, as you can apply with up to three other people.  

When do I have to pay back the Help to Build equity loan? 

You’ll have to pay back your equity loan by the end of your term, which is typically 25 years, or when you sell your home or repay your mortgage. 

You may also have to pay the loan in full if you break your contract. You can also choose to repay your loan early. 

How do I apply to the Help to Build scheme? 

If you’re confident that the Help to Build scheme is right for you, the next steps are: 

  • Get a decision in principle for your mortgage from a lender registered with the Help to Build scheme. You may need to have outline planning permission before approaching your mortgage lender. You can also talk to a broker via Unbiased, who’ll look for the best deal based on your unique circumstances. 

  • You then need to apply online for the Help to Build scheme – a broker may be able to support you with your application. 

  • If successful, you’ll receive an equity loan based on the estimated cost of the land and building costs. You’ll then have three years to buy your land and build your home. 

  • Once your property is built and you have your build warranty, your equity loan will be paid to your lender to reduce the mortgage you need. 

  • You’ll need to repay the equity loan and your mortgage. 

During the period when you’re building your new home, your mortgage lender will check in regularly and release lump sum payments at different stages to cover your costs.  

What are the pros and cons of the Help to Build scheme? 

There are many advantages and disadvantages of the Help to Build scheme you should consider. 

  • You get to build the home you want, wherever you want in England. 

  • You only need a 5% deposit out of the total estimated costs for buying land and building your home.   

  • Your equity loan is interest-free for five years. 

  • Self-build mortgages can be more expensive than traditional ones as they are seen as riskier. 

  • When you’re in the seventh year of your loan, you’ll start getting charged the inflation rate from the CPI, plus 2%, so rates can be high.  

  • There are limits on how much you can borrow via the scheme, and you’ll need to buy the land and build your home within three years. 

Want to build your dream home? 

Unbiased can help you quickly discover a qualified mortgage broker who can look at your unique circumstances to help you decide the best way for you to get on the property ladder.   

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About the author
Lisa-Marie Voneshen is a Senior Content Writer at Unbiased. She is an award-winning journalist with nearly a decade of experience writing and editing content across various areas, including personal finance and investing.