Help to Buy
What is Help to Buy - Equity Loan?
Please be aware that there has been a recent change to the fees charged and an initial monthly management fee of £1 is now payable by direct debit from the start of the Agency loan until it is repaid.
- The maximum you can borrow from Help to Buy in England is £120,000 and up to £240,000 for London. There is no minimum amount.
- Buyers must provide a deposit of a minimum of 5% of the full purchase price of the home bought under this scheme.
- After five years you will be required to pay an interest fee of 1.75% of the amount of your Help to Buy Equity Loan at the time you purchased your property, rising each year after that by the increase (if any) in the Retail Prices Index (RPI) plus 1%.
- The loan itself is repayable after 25 years or on the sale of the property if earlier.
- You must pay a monthly management fee of £1 per month from the start of the loan until it is repaid.
- The total amount repayable by you will be the proportion of the market value of your home that was funded by this loan, plus interest and charges. The amount you will have to repay under the loan agreement will depend on the market value of your home when you repay the Help to Buy equity loan and the rate of inflation in the meantime.
For further information please view the Help to Buy Buyer’s Guide
In this example below, the Help to Buy buyer has purchased a £200,000 home with a deposit of £10,000 and a mortgage of £150,000. The Agency has contributed an Equity Loan totalling £40,000 or 20% of the total purchase price.
|Example of a purchase with an equity loan scheme||Cost||Percentage|
|Open market price of new home||£200,000||100%|
|Help to Buy buyer mortgage @@ 75%||£150,000||75%|
|Help to Buy buyer pays minimum 5% deposit||£10,000||5%|
|Help to Buy buyer total contribution||£160,000||80%|
|Agency Help to Buy assistance 20% equity loan||£40,000||20%|
In this example, when the home is sold, the Agency will be entitled to 20% of the total sale price.
If you would like to discuss the Help to Buy scheme, please contact Help to Buy South West:
- 0300 100 0021
Have you recently purchased a new home with a Help to Buy: Equity Loan? If so, we’re keen to hear about your home buying experience in this short survey
If you are a Developer and wish to apply for funding through the Help to Buy Equity Loan Scheme, you can find the registration document and submission forms Here
Help to Buy is available in England from house builders registered to offer the scheme. Help to Buy has been available since 2013. In November 2015, Government announced an extension of the initiative up to 2021 (it may close earlier if all of the funding is taken up before 2021).