The Help to Buy scheme is designed to do just that, help hard-working people like you take steps to buy your own home. Whether you want to get onto the housing ladder or move up it, Help to Buy Equity Loan makes it possible to buy a new-build home priced up to £600,000 with as little as a 5% deposit.
How does it work?
With the Help to Buy Equity Loan scheme the Government lends you up to 20% of the cost of a new-build home, so you’ll only need a minimum 5% cash deposit and a 75% mortgage to make up the rest. This equity loan is funded by the Homes and Communities Agency (HCA).
You won’t be charged interest on the 20% loan for the first five years of owning your home. After five years the equity loan will be subject to a fee of 1.75% per annum on the outstanding amount. This fee will increase each year by Retail Price Index (RPI) plus 1%. We always recommend that you seek financial advice to determine how much your monthly payments will be at this point.
Help to Buy would like to remind all its applicants to be vigilant when making payments in relation to the purchase of a property to avoid the risk of any fraud in relation to conveyancing. Please see guidance.
Repaying your Equity Loan
When you sell your property, or choose to repay some or all of the equity loan, the amount you have to pay back will be based on the market value of your property at that time. You will need to contact the Mortgage Administrator in order to do this.
If Help to Buy isn’t for you, don’t worry! There are other low cost home ownership schemes, such as Shared Ownership, that might be.
If you are concerned about the costs of owning a house you can use the budget tool from The Money Advice Service which can be found on the link below.
Find out more