Help to Buy – Equity Loan
How does it work?
The Government lends you between 10% and 20% of the cost of your new-build home, so that you’ll only need a 5% cash deposit and 75% mortgage to make up the rest.
If you purchased a home valued £200,000
| You would take out a mortgage for 75% | £150,000 |
| You would pay a 5% cash deposit | £10,000 |
| The Government would provide an equity loan for the remaining 20% | £40,000 |
| £200,000 |
You will not be charged loan fees on the 20% loan for the first five years of owning your home.
The loan is paid back either at the end of the mortgage term, or when the property is sold.
We recommend that you read the full Help to Buy – Buyers Guide, produced by the government’s Homes and Communities Agency.H
Am I eligible?
- The scheme is open to both first time buyers and existing home owners**.
- There is no maximum household income.
- You can purchase a property with a maximum value of £600,000.
- You will need a minimum 5% deposit to qualify.
- The maximum age is 75 years of age – as this impacts the mortgage.
**Home owners can reserve a new build property as long as their existing property has sold before completing on the new property.
Please visit the Homes and Communities website for Affordability Guidance.
How do I apply?
Once you have found a suitable new-build property with a participating, registered builder – you will need to complete a Property Information Form and Reservation Form with the builder.
We will then issue you an Authority to Proceed (ATP) document. Please do not apply for a mortgage until you have received this. The ATP will also advise you of the next steps.
You do not need to complete a Help to Buy East and South East application form unless you are also interested in the other Help to Buy schemes that they offer.