With a Help to Buy: Equity Loan the Government lends 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.
You won’t be charged loan fees on the 20% loan for the first five years of owning your home.
Equity loan fees
You’ll have to pay equity loan fees, but not for the first 5 years.
In the sixth year, you’ll be charged a fee of 1.75% of the loan’s value. The fee then increases every year, according to the Retail Prices Index plus 1%.
Your Help to Buy agent will contact you to set up these monthly fee payments. You’ll also get a statement about your loan each year.
Fees don’t count towards paying back the loan.
Paying back the loan
You must pay back the loan after 25 years or when you sell your home - whichever comes first. The amount you pay back depends on how much your home is worth (the market value).
Example: for a home with a £200,000 price tag
Who is eligible?
Equity loans are currently available to first time buyers as well as existing homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000.
You won’t be able to sublet this home or enter a part exchange deal on your old home. You must not own any other property at the time you buy your new home with a Help to Buy: Equity Loan.
To apply for the Help to Buy Equity Loan Scheme arrange a meeting with one of our Sales Advisors who will guide you through the process.
Upcoming changes to Help to Buy
The Government’s current Help to Buy scheme in England will end on 31st March 2021 and a new one will start on 1 April 2021 and run until March 2023. There are no changes to the current Help to Buy equity loan scheme however you would need to complete on your new home by 31st March 2021.
The new scheme wil be restricted to first-time buyers only and includes regional property price caps to ensure the scheme reaches people who need it most.
Still with just a 5% deposit and a 75% mortgage, first time buyers may be able to borrow up to 20% of the cost of a new home from the Government, or 40% in London.
Please see the image below for the regional price caps that will be in place.