last updated 5/2/2020
What is Help to Buy: equity loan?
Help to Buy: equity loan is available to all that aspire to own a new build home, but struggle to access or afford the repayments on a low deposit mortgage. Whether you are looking to buy your first home, or move up the property ladder, you could now benefit from getting additional government help to buy a brand new house through the Help to Buy: equity loan scheme.
Under the scheme
- Government provides equity loan of 20%
- You arrange a mortgage for 75%
- Meaning your deposit is 5%
You won't be charged loan fees on the 20% loan for the first five years of owning your home.
Example: for a home with a £200,000 price tag.
Many developers advertise plots that are eligible for Help to Buy, so you can search for Help to Buy homes now using our property search at the top left hand side of this page.
Am I eligible for Help to Buy: equity loan?
To be eligible for a Help to Buy: equity loan property, you must:
- Be able to demonstrate access to savings or funds to pay, if required, a deposit (which may be 5% or more of the purchase price), legal fees, stamp duty and costs of moving,
- Be purchasing a property costing £600,000 or less
- Have a good credit history
- Take out any mortgage with a qualified lender (e.g. a bank or building society)
- If you are a home owner wishing to buy a larger property for your family you will need to remove your name(s) from any other property deed prior to or at the point of completion of your new property.
What is happening to Help to Buy from 1 April 2021 to 31 March 2013
A new version of the Help to Buy scheme is operating from 1 April 2021 until 31 March 2023 which introduces changes to ensure the scheme is better targeted towards those who most need support to achieve home ownership. The key changes are:
- The scheme will only be available for first time buyers, defined as those who haven't previously owned or purchased property.
- The scheme will introduce regional property price caps based on local markets, which will set the maximum price of a new build home that can be cought with Help to Buy in any region.
The regional cap for properties in the South West will be £349,000
*Eligible applicants will be offered an equity loan up to a maximum of 20% of the purchase price (based on the open market value). Applicants are required to fud at least 80% of the purchase price by means of a conventional mortgage, savings and any deposit where required. For the first five years there is no fixed fee charged on the equity component. At the start of year six a fee of 1.75% is payable on the equity loan, which rises annually by RPI inflation plus 1%. The equity loan is provided by the HCA and held as a second charge. Terms and conditions apply and full details will be provided on request. This offer is subject to status and only available on selected properties in England only. It is not offered with any other promotion. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE