Help to Buy Calculator: ISA & Equity Loan 2026
The Lifetime ISA (LISA) is the primary government Help to Buy scheme in 2026, offering a 25% bonus (up to £1,000/year) on savings used for a first home up to £450,000. The original Help to Buy Equity Loan scheme closed to new applications in 2023, but existing borrowers must understand repayment rules. Shared Ownership allows you to buy 25–75% of a home and pay rent on the remainder.
LISA Bonus = Annual Contribution (max £4,000) × 25% = Up to £1,000/year government bonus
Buying your first home in the UK is a major financial milestone, and the government offers several schemes to help make it achievable. While the original Help to Buy Equity Loan scheme closed to new applicants in March 2023, the Lifetime ISA continues to provide valuable first-time buyer benefits, and Shared Ownership offers an affordable route to property ownership.
Our Help to Buy Calculator helps you understand which schemes you qualify for, how much government support you can receive, and the true cost of each option. For comprehensive UK property calculators including stamp duty, mortgage affordability, and conveyancing fees, visit our partner site UK Calculator.
What This Means
Your calculation shows the total savings plus government bonus you can accumulate over your chosen time period using the Lifetime ISA. Remember that LISA funds can only be used for a first home purchase costing £450,000 or less, and the property must be purchased with a mortgage. Withdrawing LISA funds for any other purpose (before age 60) incurs a 25% penalty, which means you lose the government bonus and 6.25% of your own contributions.
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UK First-Time Buyer Schemes Available in 2026
Here is a comprehensive overview of every government scheme available to help you buy your first home:
| Scheme | Status in 2026 | Max Property Price | Key Benefit |
|---|---|---|---|
| Lifetime ISA (LISA) | Active — open to new applications | £450,000 | 25% government bonus on savings |
| Help to Buy Equity Loan | Closed (March 2023) — existing borrowers only | N/A | Interest-free equity loan (first 5 years) |
| Shared Ownership | Active | £250,000–£420,000 (regional) | Buy 25–75% share, rent the rest |
| First Homes scheme | Active (limited availability) | £250,000 after discount (£420K London) | 30–50% discount on market value |
| Right to Buy | Active (council tenants) | Varies | Up to 70% discount for eligible tenants |
| Help to Buy ISA | Closed (November 2019) | £250,000 (£450K London) | Bonus claimed at completion only |
Lifetime ISA (LISA): The Primary Help to Buy Scheme in 2026
How the LISA Works
- Open to anyone aged 18–39
- Save up to £4,000 per tax year
- Government adds a 25% bonus: up to £1,000/year
- Use for a first home (up to £450,000) or retirement (age 60+)
- Must be open for at least 12 months before you can buy
- Property must be purchased with a mortgage
LISA Savings Projection
| Saving Period | Your Contributions | Government Bonus | Investment Growth (4%) | Total |
|---|---|---|---|---|
| 1 year | £4,000 | £1,000 | £100 | £5,100 |
| 2 years | £8,000 | £2,000 | £510 | £10,510 |
| 3 years | £12,000 | £3,000 | £1,230 | £16,230 |
| 4 years | £16,000 | £4,000 | £2,280 | £22,280 |
| 5 years | £20,000 | £5,000 | £3,680 | £28,680 |
A couple each with a LISA can accumulate £57,360 over 5 years — enough for a 10%+ deposit on properties up to £450,000.
LISA Withdrawal Penalty Warning
If you withdraw LISA funds for anything other than a qualifying first home or retirement, you will lose 25% of the withdrawal amount. On £5,000 (£4,000 savings + £1,000 bonus), the penalty is £1,250 — meaning you get back only £3,750, which is £250 less than you contributed. The penalty effectively confiscates the bonus AND 6.25% of your own money.
Help to Buy Equity Loan: Repayment Guide for Existing Borrowers
Although the Help to Buy Equity Loan scheme closed to new applicants in 2023, approximately 380,000 households have existing equity loans that must be managed and eventually repaid. Here is what you need to know:
Key Dates and Fees
| Year | Fee on Equity Loan | Notes |
|---|---|---|
| Years 1–5 | Interest-free | Only a £1/month management fee |
| Year 6 | 1.75% | Interest charges begin |
| Year 7+ | 1.75% + RPI + 1% | Increases annually with inflation |
Critical: The equity loan is a percentage of your home's current value, NOT the original amount. If you took a 20% equity loan on a £300,000 home (£60,000), and the home is now worth £400,000, you owe 20% of £400,000 = £80,000.
Repayment Options
- Remortgage to pay off: Take a larger mortgage to repay the equity loan. Best done before year 6 when interest charges start.
- Sell the property: The equity loan percentage is deducted from sale proceeds.
- Part repayment: You can pay off 10%+ of the current property value at any time (minimum £1,000 per repayment).
- Continue paying: Keep the loan and pay the annual interest charges, which increase each year.
For more UK-specific property calculators, visit UK Calculator for stamp duty, mortgage, and conveyancing tools.
First Homes Scheme: 30–50% Discount on New Builds
The First Homes scheme offers 30–50% discounts on selected new-build properties. The discount is passed on to future first-time buyers when you sell.
Eligibility
- First-time buyer (never owned a home)
- Household income under £80,000 (£90,000 in London)
- Property price must be £250,000 or less after discount (£420,000 in London)
- Must use a mortgage for at least 50% of the discounted price
- Must be your primary residence
First Homes Example
| Market Value | Discount (30%) | Your Price | Deposit (10%) | Mortgage Needed |
|---|---|---|---|---|
| £300,000 | -£90,000 | £210,000 | £21,000 | £189,000 |
| £350,000 | -£105,000 | £245,000 | £24,500 | £220,500 |
Key restriction: When you sell a First Home, you must sell at the same percentage discount below market value. This means the discount benefits future buyers too, but limits your capital gain compared to buying on the open market.
Recommended Resources
- Property Investment for Beginners — Understanding UK property buying from a financial perspective.
- The Complete Guide to Property Investment by Rob Dix — Comprehensive UK-focused property guide with government scheme analysis.
- Money: A User's Guide by Laura Whateley — UK personal finance guide covering LISA strategy and property buying.
For our full range of UK property calculators — including stamp duty, mortgage affordability, council tax, and conveyancing fees — visit UK Calculator. For UK moving costs, see our cost of moving house calculator.
Frequently Asked Questions
Is Help to Buy still available in 2026?
The original Help to Buy Equity Loan scheme closed to new applications in March 2023. However, the Lifetime ISA (LISA) remains active and provides a 25% government bonus on savings for first-time buyers. Shared Ownership and the First Homes scheme are also active alternatives. Existing Help to Buy Equity Loan borrowers continue under the original terms and should plan for repayment or remortgage before year 6 interest charges begin.
What is the maximum Lifetime ISA bonus?
You can save up to £4,000 per tax year into a LISA and receive a 25% government bonus of up to £1,000 per year. Over 5 years, that is £5,000 in free government money on £20,000 of savings. A couple both using LISAs doubles this to £10,000 bonus on £40,000 saved. The LISA can be used to buy a first home costing up to £450,000, or held until age 60 for retirement.
Can I use a Lifetime ISA and Shared Ownership together?
Yes. You can use your LISA savings as the deposit for a Shared Ownership purchase, as long as the total property value is £450,000 or less (not just your share). This combination is powerful: save £28,680 over 5 years in a LISA (including bonus), use it as a deposit on a 25–40% share of a property, and keep monthly costs lower than buying outright.
What happens if I withdraw LISA money for something other than a first home?
You will incur a 25% withdrawal penalty. This sounds like you just lose the bonus, but it is actually worse: on £5,000 (£4,000 you saved + £1,000 bonus), the penalty is 25% of £5,000 = £1,250. You receive only £3,750 — which is £250 less than you put in. The government temporarily reduced this to 20% during the pandemic but it has returned to 25%. The penalty does not apply after age 60 or for terminal illness.
How does Shared Ownership staircasing work?
Staircasing means buying additional shares of your Shared Ownership property. You can staircase in increments (typically 10%+ at a time) by getting a new valuation and remortgaging. The cost is based on the property's current value, so if values have risen, you pay more per additional share. Once you reach 100%, you own the property outright and no longer pay rent on the remaining share. Most housing associations charge £150–£300 for a staircasing valuation, plus legal fees of £500–£1,000.
Should I repay my Help to Buy Equity Loan before year 6?
Generally yes, if you can afford to. The loan is interest-free for the first 5 years, but from year 6 you pay 1.75% (rising annually at RPI + 1%). On a £60,000 loan, that is £1,050 in year 6, increasing each year. By year 10, with 4% inflation, you could be paying £1,500+/year. Remortgage to pay off the equity loan before year 6 if possible. If your home has appreciated, the loan amount (as a percentage of current value) will be larger than the original amount borrowed.