Help to buy
Help To Buy
What is Help to Buy
The Help to Buy scheme offers an equity loan where the government lends first-time buyers in England money to buy a newly built home. This must be used to buy your main residence and can’t be used to buy a second home or a buy-to-let property.
- You need a deposit of at least 5% of the purchase price.
- You can borrow 20% (40% in London) of the purchase price. This amount is interest-free for five years.
- The maximum purchase price for a Help to Buy property depends on what region of England you live in.
- The Help to Buy to buy a property price cap for London is £600,000. Applications for the Help to Buy equity loan will run until 31 March 2023.
Help To Buy
How the Help to Buy equity loan works
- You need at least 5% of the sale price of your new-build flat or house as a deposit.
- The government lends you up to 20% (or 40% if you live in London) of the sale price up to the regional limits.
- You borrow the rest (up to 75%, or 55% if you live in London) from a mortgage lender, on a repayment basis.
- The equity loan is interest-free for five years.
- From year 6, you’ll be charged 1.75% which will increase by the Consumer Price Index (CPI) plus 2% (1% if you took the equity loan before December 2019).
- The equity loan must be repaid after 25 years, or earlier if you sell your home.