You may be able to get financial help from the government to buy a home. You could get: a loan to help with the cost of a new-build home if you’re a first-time buyer (in England and Wales) a home through shared ownership (UK wide) The Help to Buy ISA scheme closed to new accounts on 30 November 2019. You can still open a Lifetime ISA to save for a first home. Buying your council or housing association property There are also schemes for council tenants and housing association tenants .

Help to Buy: Equity Loan

You can get an equity loan towards the cost of buying a new-build home as a first-time buyer. This guidance applies to England. There’s different guidance on how to apply for an equity loan in Scotland and how to apply for an equity loan in Wales . Eligibility You must be: 18 or over a first-time buyer able to afford the fees and interest payments You cannot get the equity loan if you have ever: owned a home or residential land in the UK or abroad had any form of sharia mortgage finance You can apply on your own or with other people. All applicants must meet the eligibility criteria. If you’re married, in a civil partnership, or cohabiting with your partner (and you plan on continuing to live together), you must make a joint application. The property you buy with your equity loan The property must be: a new-build sold by a Help to Buy registered homebuilder the only home you own and live in It must not have been lived in by anyone before you buy it. You cannot sub-let or rent it out after you buy it. There’s also a ‘maximum property purchase price’ limit for the home you buy depending on which region it’s in. You can buy a home up to and including the maximum property purchase price limit. Region Maximum property purchase 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 it works You’ll need to: pay a minimum deposit of 5% of the property purchase price arrange a repayment mortgage of at least 25% of the property purchase price You can then borrow an equity loan to cover from 5% and up to 20% of the property purchase price of your newly built home. If the property is in London, you can borrow up to 40%. The equity loan percentage you borrow is used to calculate your interest and equity loan repayments. Example Property purchase price Equity loan percentage Equity loan amount borrowed Bought for £200,000 Borrowed 20% £40,000 The equity loan percentage used to calculate your interest and repayments is 20%. Interest payments You do not have to pay interest for the first 5 years. In the sixth year, you’ll be charged interest at a rate of 1.75%. This will be applied to the equity loan amount you originally borrowed (the equity loan percentage of the property purchase price). This annual interest is spread over the year in monthly payments. Example Property purchase price Equity loan percentage Equity loan Annual interest payment in year 6 (1.75% of the equity loan) Monthly interest payment in year 6 Bought for £200,000 Borrowed 20% £40,000 £700 £58.33 The interest rate increases every year in April, by adding the Consumer Price Index (CPI) plus 2%. Your interest payments will decrease if you make a part repayment of the equity loan. This is because the amount the interest rate is applied to will reduce. Fees You’ll need to pay a monthly management fee of £1 when you take out the equity loan until you pay it off. If you change your equity loan, including if you remortgage or make an equity loan repayment, you’ll need to pay administration fees. You’ll also have to pay other fees associated with buying and owning a home, for example, legal and mortgage arrangement fees and for market value reports. Paying interest and fees does not count towards paying back the equity loan. If you do not keep up with payments, you may need to pay recovery costs or interest on the amount you owe. Paying back the equity loan You can pay back part or all of your equity loan at any time. Repayments are based on your equity loan percentage and the market value of your home at the time you want to make a repayment. You’ll need to get a market valuation report from a chartered surveyor when you make a repayment. Paying back part of your equity loan The smallest repayment you can make is 10% of the market value of your home. Paying back part of your equity loan will reduce the monthly interest payments you’ll need to pay from the sixth year of taking out the equity loan. Example Market value of your home Equity loan percentage Amount Bought for £200,000 Borrowed 20% £40,000 Value at time of repayment £220,000 Paying back 10% £22,000 Your remaining equity loan is 10% of the market value of your home. From the sixth year, you’ll be charged interest monthly at a rate of 1.75% on 10% of the original property purchase price. The interest rate will increase every year in April, by adding the Consumer Price Index (CPI) plus 2%. Paying back all your equity loan You must repay all your equity loan when you: reach the end of the equity loan term (normally 25 years) pay off your repayment mortgage sell your home You may also be asked to repay the equity loan in full if you do not keep to the terms and conditions. If you sell your home, you’ll pay the equity loan percentage of the market value or agreed sale price if it’s higher. Example Market value of your home Equity loan percentage Amount Bought for £200,000 Borrowed 20% £40,000 Value at time of full repayment £250,000 Paying back 20% £50,000 If you want to pay off your equity loan and you’ve previously made part repayments, you’ll pay the equity loan percentage you still owe of the market value. Example Market value of your home Equity loan percentage Amount Bought for £200,000 Borrowed 20% £40,000 Value at time of part repayment £220,000 Paying back 10% £22,000 Value at time of full repayment £240,000 Paying back 10% £24,000 How to apply To apply, contact a Help to Buy agent for the area you want to buy your home. Read the Homebuyers’ guide to Help to Buy: Equity Loan (2021-2023). Help to Buy: Equity Loan (2013-2021) Applications for the 2013 to 2021 scheme are now closed. Read the Homebuyers’ guide to Help to Buy: Equity Loan (2013-2021) for more information.

Buying through shared ownership

You can get a shared ownership home through a housing association. You buy a share of your home (between 25% and 75%) and pay rent on the rest. There are different rules for shared ownership in Northern Ireland and shared ownership in Scotland . Contact your local authority to find out about buying a shared ownership home in Wales. Eligibility You can buy a home through shared ownership if your household earns £80,000 a year or less (or £90,000 a year or less in London) and any of the following apply: you’re a first-time buyer you used to own a home, but cannot afford to buy one now you’re an existing shared owner How it works Shared ownership properties are always leasehold . Older people If you’re aged 55 or over you can buy up to 75% of your home through the Older People’s Shared Ownership (OPSO) scheme. Once you own 75% you will not pay rent on the rest. Disabled people You can apply for a scheme called home ownership for people with a long-term disability ( HOLD ) if other Help to Buy scheme properties do not meet your needs, for example you need a ground-floor property. With this scheme you can buy up to 25% of your home. If you’re disabled you can also apply for the general shared ownership scheme and own up to 75% of your home. Buying more shares You can buy more of your home after you become the owner. This is known as ‘staircasing’. The cost of your new share will depend on how much your home is worth when you want to buy the share. It will cost: more than your first share if property prices in your area have gone up less than your first share if property prices in your area have gone down The housing association will get your property valued and let you know the cost of your new share. You’ll have to pay the valuer’s fee. Selling your home If you own a share of your home, the housing association has the right to buy it first. This is known as ‘first refusal’. The housing association also has the right to find a buyer for your home. If you own 100% of your home, you can sell it yourself. How to apply To buy a home through a shared ownership scheme contact the Help to Buy agent in the area where you want to live.

You can no longer open a Help to Buy ISA . If you already have a Help to Buy ISA You can pay in up to £200 each month. The government will top up your savings by 25% (up to £3,000) when you buy your first home. If you are buying with someone who also has a Help to Buy ISA , both of you will get the 25% bonus. You can pay into the ISA until November 2029. You can claim the 25% bonus until November 2030. When you buy your property The home you buy must: have a purchase price of up to £250,000 (or up to £450,000 in London) be the only home you own be where you intend to live Your solicitor or conveyancer will apply for the extra 25%. You do not have to pay it back. Example Your savings Government payment Total £1,600 (minimum) £400 £2,000 £4,000 £1,000 £5,000 £12,000 (maximum) £3,000 £15,000 You can use the scheme with an equity loan .

Affordable home ownership schemes

Overview

You may be able to get financial help from the government to buy a home.

You could get:

a loan to help with the cost of a new-build home if you’re a first-time buyer (in England and Wales)
a home through shared ownership (UK wide)

The Help to Buy ISA scheme closed to new accounts on 30 November 2019. You can still open a Lifetime ISA to save for a first home.

Buying your council or housing association property

There are also schemes for council tenants and housing association tenants.

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Affordable home ownership schemes

Overview

Buying your council or housing association property

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Affordable home ownership schemes

Overview

Buying your council or housing association property

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