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Help to Buy is a government backed scheme offering an equity loan to assist you in the purchase of your new home, with a deposit as little as 5% and the government adding up to an additional 20%, enabling you to buy with effectively a 25% deposit. The scheme will is only available to first time homebuyers, see below for eligibility.
If you are looking to buy we advise you arrange a no obligation consultation with one of our Mortgage Advisers by calling 01395 222391.
There’s also a ‘maximum property purchase price’ limit for the home you buy depending on which region it’s in. You can buy a home up to and including the maximum property purchase price limit.
| Region | Price cap for Help to Buy homes |
|---|---|
| North East | £186,100 |
| North West | £224,400 |
| Yorkshire & The Humber | £228,100 |
| East Midlands | £261,900 |
| West Midlands | £255,600 |
| East of England | £407,400 |
| London | £600,000 |
| South East | £437,600 |
| South West | £349,000 |
Equity Loan
What is it?
The Help to Buy equity loan makes new build homes available to all home buyers (not just first time buyers) who wish buy a new home, but may be constrained in doing so. As long as you have a deposit of 5%, up to 20% of the purchase price is available through an equity loan funded by the Government. A mortgage for the remaining 75% will need to be secured from a commercial lender.
Who qualifies?
- You must have a minimum deposit of 5% of the full purchase price.
- You must be eligible to take out a mortgage from a commercial lender.
- You must be a first time buyer aged 18 or over
What properties are included?
- New build properties only
- Properties under £349,000 in value.
- Help to Buy is currently only available in England and sold by a Help to Buy registered homebuilder
- The only home you own and live in
You won’t be charged interest on the loan for the first five years. Interest fees start at 1.75% and rise each year in April by the Consumer Prices Index including owner occupiers’ housing costs (CPIH) plus 2%. You pay a monthly management fee of £1 for the life of the loan.
Homes England, the lender, secures the equity loan as a second charge on your Help to Buy home. You must repay the equity loan when you sell the home, pay off your mortgage or reach the end of your loan term. But, you can repay all or 10% chunks of the loan any time before then.
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