Help to Buy

Help to Buy: Equity Loan (2021-2023)

Help to Buy is a government scheme designed to help first time buyers who have never owned a property before to advance up the property ladder.

Who is eligible?

Help to Buy: Equity Loan (2021-2023) are available to first time buyers. The home you want to buy must be newly built with a price of up to £600,000.(see the Help to Buy site for regional caps)

How does it work?

With a Help to Buy equity loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.

You must buy your home from a homebuilder registered for Help to Buy: Equity Loan.

The amount you pay for a home depends on where in England you buy it.

When getting a mortgage you will be able to borrow up to a maximum of 4.5 times your salary.

Help to Buy Equity Loan example

How do I pay back the Help to Buy equity loan?

You must pay back the loan after 25 years or when you sell your home - whichever comes first.

You will not be charged any interest on the 20% loan for the first five years of owning your home.

However a management fee of £1 a month will be applicable from the date of purchase for the duration of the equity loan.

From year six, a fee of 1.75% is payable on the equity loan, which rises annually by CPI (Consumer Price Index) inflation plus 2%.

For full information about the scheme, please visit helptobuy.gov.uk

Help to Buy London - how does it work?

Help to Buy London is an equity loan from the government up to 40% of the value of a property, provided you have a deposit of 5% you will only need a mortgage of 55% of your new home.

What properties can I buy with Help to Buy London?

New build properties within the 32 boroughs of London up to the value of £600,000 are eligible for the Help to Buy London scheme.

When getting a mortgage you will be able to borrow up to a maximum of 4.5 times your salary.

Help to Buy London equity loan example

For full information about the scheme, please visit helptobuy.gov.uk

Announced in the March 2021 budget, the Mortgage Guarantee Scheme is available from April 2021 and offers the chance for first time buyers, as well as existing homeowners, to obtain a mortgage loan of 95% of the value of a property, provided they can raise a deposit for the remaining 5%. As it’s a high amount, lenders are being incentivised by the government (through a guarantee system) to encourage them to make the funds available to borrow.  

It applies to any property under the value of £600,000, a new build or an older property, and is not restricted to first time buyers as some schemes are.