Although it may not seem like it, you could be closer to saving for a deposit than you think.

The government has created the Help to Buy scheme to help people like you take steps to buy your own home. There are four elements of the help to buy scheme, the Help to Buy; ISA, Equity Loan, Shared Ownership and Mortgage Guarantee.

The Help to Buy ISA

When saving to buy your first home, if you save money into a Help to Buy ISA the government will boost your savings by 25%. This means that for every £200 you save you will receive a government bonus of £50.

The accounts are available to each first time buyer, not each household. This means that if you are planning to buy with your partner, for example, you could receive a government bonus of up to £6,000 towards your first home.

The minimum government bonus is £400, meaning that you need to have saved at least £1,600 into your Help to Buy ISA before you can claim your bonus. The maximum government bonus you can receive is £3,000 – to receive that; you need to have saved £12,000.

To open a Help to Buy ISA you must be 16 or over, a UK resident and you must not own a property anywhere else in the world. You must also be looking to purchase a property that costs up to £250,000 or £450,000 if you’re buying in London.

When you buy your first home, your solicitor or conveyancer will apply for your government bonus. Once they receive it, the funds will be added to the money you are putting towards your property.

Equity Loan

Equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000.

With a Help to Buy Equity Loan the Government will lend you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.

For example if you bought a home for £200,000, you’d get £150,000 (80%, from your mortgage and the cash deposit) and you’d pay back £40,000 on the loan (20%). You’d need to pay off your mortgage with your share of the money.

You won’t be charged loan fees on the 20% loan for the first five years of owning your home.

To reflect the current property prices in London, from February 2016 the Government is increasing the upper limit for the equity loan it gives new home-buyers within Greater London from 20% to 40%.

Shared Ownership

The Help to Buy Shared Ownership scheme offers you the chance to buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share. Later on, you could buy bigger shares when you can afford to.

To take part your household must earn up to £90,000 a year and you must be a first time buyer.

This scheme is only available on newly built properties or those owned by Housing Associations.

Mortgage Guarantee

A mortgage supported by the Help to Buy Mortgage Guarantee scheme works in exactly the same way as any other mortgage except that under the scheme the Government offers lenders the option to purchase a guarantee on mortgage loans.

Because of this support, lenders taking part are able to offer home buyers more high-loan-to-value mortgages (80-95%).

You will still be fully responsible for your mortgage repayments. So if you have a 5% deposit, you will need to take out and pay back a 95% mortgage.

To utilise this scheme you must be a first time buyer and be purchasing a property priced up to £600,000.

The Help to Buy options are varied and the best scheme for you depends on your individual circumstances. Fairstone’s network of independent advisers can help guide you through the process, understand the various restrictions and choose the right route for you. Find a Fairstone adviser in your area today.