Help to Buy: Equity Loan

If you are a first time buyer, you could only need a 5% deposit to 100% own a new home

 

Help to Buy: Equity Loan*

If you are a first time buyer the scheme will still allow you to purchase a property with a deposit of just 5% and a mortgage from a bank or building society. This means a maximum of 20% of the purchase price will be funded through an equity loan from the Government. 

The value of the equity loan available on new build properties will vary depending on where you live. The new regional price caps have been provided below and you can read more about the changes here.

 

The details of the scheme: 

Help to Buy: Equity Loan* is a Government-backed equity loan scheme which helps first time buyers to own a new build home. It means that home buyers can own a home with only a 5% deposit. The property purchased through Help to Buy must be your only residence and all purchasers must be able to prove that they have never previously owned a home.

Help to Buy: Equity Loan* offers up to a maximum of 20% of the purchase price through an equity loan funded by the Government. The remaining 80% is then made up through a 5% deposit contribution and a mortgage from a bank or building society.

Here's an example of how the equity loan scheme could work:

  • Based on a £180,000 purchase price
  • 5% Deposit £9,000
  • 75% Mortgage £135,000
  • 20% Help to Buy Equity Loan £36,000

The equity loan is available for first time buyers only, purchasing a new build properties in England. Regional Price caps for properties eligible for Help to Buy from 1 April 2021 to 31 March 2023 are:


North East                                 £186,100
North West                                £224,400
Yorkshire and 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

Further information on the equity loan and the repayments required is available in the Help to Buy* Buyers Guide.

 

Terms and conditions:

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP THE REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT

*Help to Buy: Equity Loan, England is available for First Time Buyers on properties up to the maximum value of the regional price caps below:

North East £186,100
North West £224,400
Yorkshire and 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

If you qualify for Help to Buy assistance and you raise a mortgage for at least 25% of the purchase price of your new home from a lender, you can borrow up to 20% of the purchase price by taking out a loan secured over your new home from the Government's Homes & Community Agency (trading as Homes England) over a period of 25 years. A 5% cash deposit is required at exchange. More may be required at completion depending upon circumstances and your lender's criteria. Help to Buy is subject to eligibility and terms and conditions. Homebuyers can find their Help to Buy agent at helptobuy.gov.uk.

The property purchased must be your only residence and you cannot have owned a home in the past. You cannot rent out your existing home and buy a second home through Help to Buy. 

Help to Buy: Equity Loan (2021-23) is not applicable on discount market value homes.

Help to Buy

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Help to Buy Buyers Guide

Help to Buy Buyers Guide

Further information about the equity loan and the repayments required.

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