Homeowners purchasing properties under the Help to Buy are now able to use 35-year mortgages.
The government is trying to remove a loophole where purchasers using the scheme have had difficulty applying for mortgages longer that 20 years.
The changes, effective immediately, give people more freedom to reduce their monthly mortgage repayments by spreading their borrowing over a longer period.
The change reflects a change in the wider mortgage market where, over the past 10 years, first-time buyers with mortgage terms greater than 35 years has doubled.
Currently, when re-mortgaging after 2 or 5 years at the end of a fixed rate period, Help to Buy homeowners cannot in practice take out a mortgage that goes on for more than 25 years after the original property purchase date.
This change to the policy opens the Help to Buy re-mortgage market for more lenders, meaning customers have more choice with the potential for more competitive mortgages.
More than 500,000 Help to Buy schemes have been used by staring their path on the property ladder.
Please contact us if you would like advice about the legal aspects of buying a property with a Help to Buy scheme.