Help to Buy: Equity Loan

HOW DOES HELP TO BUY WORK?

It’s good to have the right information to hand before you make any important decisions. So here are some key facts about how the Help to Buy: Equity Loan scheme works.  

You can find a more detailed guide to the scheme here: Help to Buy: Equity Loan

 


Buy with just 5% deposit

Help to Buy: Equity Loan is a Government-backed scheme for first time buyers that lets you buy a brand new home with just a 5% deposit and a 75% mortgage, subject to eligibiity, terms and conditions.

It works by giving you an equity loan of up to 20% of the value of your new home, which is interest-free for five years.

Is it right for me?

If you’re a first time buyer who wants a smaller deposit and lower monthly repayments, take a closer look.

5% Low deposit

You only need to put down a 5% deposit, making it easier to save up for your first home.

20% Equity loan

This Government-backed equity loan is interest-free for five years, giving you up to 20% of the value of your new home to boost your deposit.

75% Mortgage

With this boost to your deposit, you’ll have access to more competitive mortgages as you’ll only need a mortgage on 75% of the value of your new home.


Find your new home

Once you’ve found your new home, check with our Sales Executive whether it qualifies for the Help to Buy: Equity Loan scheme.

Put down a 5% deposit

The exact deposit amount will depend on the value of your new home, but it’s just a 5% deposit when you use the Help to Buy scheme.

 

Secure a good mortgage deal

If you’re not sure where to look to find the right 75% mortgage, we can happily put you in touch with an independent financial advisor who can guide you through the application process. 

Apply for Help to Buy: Equity loan

Successfully apply and you can borrow 5% to 20% of the value of your new home, interest free for five years. Your Help to Buy agent can guide you through the options available and administer your application. You can find your local Help to Buy agent here: Find a Help to Buy agent


Help to Buy: Equity Loan (2021-2023):  Eligible homebuyers can borrow 5% to 20% (40% in London) of the market value of a newly built home. Regional property price limits will apply. The equity loan is interest free for 5 years; monthly interest payments start at 1.75% and rise each year in April by the Consumer Price Index (CPI) plus 2%. Pay a £1 monthly management fee from the start. Repay your equity loan at the end of your mortgage or equity loan term, when you sell your home or any time before. The lender, Homes England, secures the equity loan as a second charge on your home. Help to Buy is subject to eligibility, terms and conditions: www.helptobuy.gov.uk. Your home may be repossessed if you do not keep up repayments on your repayment mortgage, equity loan or other loans secured against it. 
 

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