Help to Buy UK
Help to Buy: Equity loans
Equity Loans are open to both first-time buyers and home movers on new-build homes in England with a purchase price of up to £600,000.
You won't be able to sub-let your home if you use this scheme. It must also be your own property.
How it works
With an equity loan:
- You'll need to contribute at least 5% of the property price as a deposit
- The government will give you a loan for up to 20% of the price
- You'll need a mortgage of up to 75% to cover the rest
If the home in the table above sold for £210,000, you'd get £168,000 (80%, from your mortgage and the cash deposit) and pay back £42,000 on the loan (20%). You'd need to pay off your mortgage with your share of the money.
Equity loan fees
You won't be charged loan fees for the first 5 years of owning your home.
In the sixth year, you'll be charged a fee of 1.75% of the loan's value. After this, the fee will increase every year. The increase is worked out by using the Retail Prices Index plus 1%.
Your Help to Buy agent will contact you before the fees start, to set up monthly payments with your bank. You'll also be sent a statement about your loan each year.
Fees don't count towards paying back the equity loan.
Applying for an equity loan
Contact the Help to Buy agent in the area where you want to live if you'd like to buy a home with an equity loan.
You must buy your home from a registered Help to Buy builder. Your Help to Buy agent should have a list of registered builders for you to choose from.