Thanks to this English government Help to Buy (England) scheme, equity loans are now available for first-time buyers and second-time movers.
A UK government-backed scheme that could help you to move in with 5% deposit.
Equity loans are now available for homes worth up to £600,000. With Help to Buy England the English government will lend you up to 20% of the property value through an equity loan. You’ll only need to secure up to a 75% mortgage from a bank or building society.
From the time you receive the shared equity loan, you will be charged an administration fee of £1 per month for the first 5 years of owning your home.
Your dream home is worth £200,000
You need to contribute at least 5% of the property price as a deposit: £10k
The english government will give you a shared equity loan for up to 20% of the price: £40k
The mortgage lender. You will need a mortgage of up to 75% to cover the rest: £150k
Myths of Help to Buy:
It’s just for first time buyers
The Help to Buy initiative is available for all home buyers, not just for first time buyers. However, the property purchased must be your only residence and it is no available to assist buy-to-let investors. You cannot rent our your existing home and buy a second home through Help to Buy
I need to pay back the loan after five years
The help to buy equity loan is interest free for the first five years. After this you will be required to pay an interest fee of 1.75% of the amount of your Help to Buy shared equity loan at the time you purchased your property, rising each year after that by the increase (if any) in the Retail Price Index. The repayments you make will sit along your mortgage repayments. The loan itself is repayable after 25 years or on the sale of the property if earlier.
I won’t own my house
This is not true. A Help to Buy Mortgage Guarantee is essentially the same as a traditional 95% repayment mortgage, with all the usual terms and conditions between you and the lender. In reality, some may not even notice it is a Help to Buy mortgage, other than being a 95% loan to value.
Help to Buy England is available on the majority of our UK developments. For more information on Help to Buy England, please click here.
For information on Help to Buy Wales, please click here
Please contact our homes advisor for more information.