Armed Forces Help to Buy scheme and mortgages

Carl Atkinson

3-minute read

Last updated:

February 12, 2021

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What is the Armed Forces Help to Buy (FHTB) scheme?

If you're in the armed forces you can use a £200-million scheme designed to help you get on the property ladder. It launched back in 2014 to help change the fact there was a low rate of homeownership across army, navy and airforce personnel, but has been extended until the very end of 2022.

What does it do for your chances of getting on the ladder? 

You could borrow up to 50% of your salary, interest-free to get your first home.

You can also use the scheme to "move to another property on assignment" or as their families' needs change.

How does the Armed Forces Help to Buy Scheme help you get a mortgage?

By boosting your deposit. 

The larger your deposit, the better the chances you have of getting approved for a mortgage. Furthermore, the larger the deposit, the better the rates you could get.

Let's look at an example:

  • You earn £28,000 a year
  • You have saved up £6,000 and want to buy a £150,000 property
  • That's a 4% deposit
  • In the current market, most lenders require you to have at least a 10% deposit
  • However, if you have an extra £14,000 from the Armed Forces Help to Buy Scheme, then your deposit is now £20,000 or 13% – and that's enough to get a mortgage

Are there any downsides?

The loan is interest-free, but you will need to pay it back and that could affect your affordability. 

That means with the extra monthly financial commitment of paying back the loan, a lender may not think you could afford to pay back the mortgage too – especially if interest rates rise or you have another change in your circumstances.

That said, the loan is designed to get you on the ladder, and there are many options to repay, so you could reduce its impact on your affordability.

Paying back the Armed Forces loan:

  • You pay the loan back every month over 10 years
  • You can make overpayments to pay it back quicker
  • You can choose to start paying it back straight away, 6 months after getting it, or in the final 10 years of your service 

Are there any other costs?

The loan is interest-free, but you do need to pay between £6 and £7 a month in insurance.

What lenders can you apply to? 

Many mainstream lenders accept applications using the Armed Forces scheme. You can weigh up the best options with our expert Mojo advisers.

Do you need an armed forces mortgage broker?

No. But as with any mortgage application, using a broker such as Mojo, can really help you find a deal that could save you thousands of pounds over the coming years.

Can anyone in the armed forces use the loan?

You need to have completed the pre-requisite length of service, have more than 6 months left to serve, and meet the right medical categories.

Even if at first glance you do not meet these criteria it can be worth speaking to the Defence Business Services Military Personnel, FHTB Section as some exceptions can be allowed – especially with regards to medical and personal circumstances.

How much can you borrow?

A maximum of £25,000.

Do you have to use it as a deposit?

It has to be used to buy a property, but can also be used towards associated costs such as solicitor fees.

Can you use the Armed Forces Help to Buy scheme and the normal Help to Buy scheme?

The FHTB scheme isn't related to mainstream schemes and so can be used alongside the government’s Help to Buy schemes (Equity Loan and Shared Ownership), Help to Buy (Scotland) and Help to Buy (Wales).

How do you get your FHTB loan?

You apply for your loan via the Joint Personnel Administration system. 


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