The Forces Help to Buy Scheme (FHtB) is a scheme available to those who are working in the armed forces to secure a large loan worth up to 50% of their annual salary, to a cap of £25,000, to use to get themselves onto the property ladder.
FHtB can be used as a replacement for the Armed Forces Home Ownership Scheme (AFHOS) and became available on the 1st April 2014. AFHOS was left to run out of funding as the regular Help to Buy schemes ran their course, and FHtB is its updated, spiritual successor.
Some servicemen and women can have difficulty getting a mortgage because of the affect the touring nature of their job has on their credit rating. FHtB helps address this unfair balance.
FHtB is available for three years from the starting point, but this may be extended or shortened in the future, depending on the success of all the Help to Buy schemes.
There are some eligibility rules. Applicants must:
- Have served for at least two years
- Have more than six months of service time left when applying
- Not have owned a property within 50 miles of the prospective property to buy, within the last year
Eligible people can apply to get a loan for 50% of their annual salary (or capped at £25,000) to spend on buying a house. This will aid with getting a mortgage and must serve as the deposit.
However, the mortgage lender is likely to treat each individual case separately, and so loan amount and whether the mortgage will be passed is completely dependent on the lender.
The specific details of the loan such as the interest rates and the repayment rate are subject to individual cases and depend on the lender.
The money must be paid back by the time the service man or woman leaves the forces, or within 10 years, depending which comes first.
In most cases, the repayment rates are adjusted to ensure that the amount borrowed is paid off within the decade depending on the borrower’s salary, or the borrower will have to ensure that they can pay off the remainder once they have left service.