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Get on the property ladder with the Help to Buy scheme

All you need to know about upcoming changes to the government’s Help to Buy equity loan scheme.

If you’re looking to buy your first home, you probably already know about the government’s Help to Buy equity loan scheme. It’s proved popular since launch in 2013, with almost 300,000 properties bought as part of the initiative so far. But some aspects of the scheme are changing later this year, and it’s important you understand whether you’ll still be eligible for help.

Are you eligible? The new Help to Buy equity loan rules apply from April 2021 to March 2023. To qualify, you must:

  • be a first-time buyer in England;

  • have a deposit worth at least 5% of the property you’re looking to buy;

  • borrow a minimum of 5% and up to a maximum of 20% (40% in London) of the full purchase price of a new-build home from the government; and

  • buy the property from a homebuilder registered with the scheme.

What are the price caps?

The price of your home can’t exceed the maximum figure outlined by the government. These limits vary depending on where you’re looking to buy. Region Maximum property price

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

How does it work?

The total cost of buying your home will be covered by the government equity loan as well as your deposit and mortgage. The percentage you borrow from the government is based on the market value of your home when you buy it. For example, if the property is worth £200,000, you might ask the government for a 20% equity loan (£40,000) to add to your 5% deposit (£10,000) and 75% mortgage (£150,000). The loan is interest free for the first five years, and from the sixth year you’ll be charged interest at 1.75% each month. This rate increases every year after that in line with the consumer price index, plus 2%. You’ll continue to pay interest until you’ve fully repaid the loan. You can repay all or part of the equity loan at any time, but a part payment must be a least 10% of what your home is worth at the time.

You’ll need to pay the equity loan back in full if you:

  • reach the end of the equity loan term

  • pay off your mortgage

  • sell your home

  • do not follow the terms set out in the equity loan contract

What if the value of my home changes?

The amount you have to pay back is based on the market value of the property when you choose to repay. If the market value of your home rises, so does the amount you owe on your equity loan – if it falls, the amount you owe also falls. Rest assured we are here to help if you have any questions about Help to Buy mortgages


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