Help to Buy equity loan

You can get a low-interest loan towards your deposit. This is called an equity loan. Eligibility The home you buy must: be a new build have a purchase price of up to £600,000 in England (or £300,000 in Wales) be the only one you own not be sub-let or rented out after you buy it be one that you can show you cannot afford (if you’re applying in Wales) How it works With an equity loan: you need a 5% deposit the government will lend you up to 20% (up to 40% in London) you need a mortgage of up to 75% for the rest (up to 55% in London) You must buy your home from a registered Help to Buy builder - your agent should have a list. There are different rules for equity loans in Wales . Example For a £200,000 property Amount Percentage Cash deposit £10,000 5% Equity loan £40,000 (£80,000 in London) 20% (40% in London) Mortgage £150,000 (£110,000 in London) 75% (55% in London) Equity loan fees You’ll have to pay equity loan fees, but not for the first 5 years. In the sixth year, you’ll be charged a fee of 1.75% of the loan’s value. The fee then increases every year, according to the Retail Prices Index plus 1%. Your Help to Buy agent will contact you to set up these monthly fee payments. You’ll also get a statement about your loan each year. Fees do not count towards paying back the loan. Paying back the loan You must pay back the loan after 25 years or when you sell your home - whichever comes first. The amount you pay back depends on how much your home is worth (the market value). Example Market value of your home Equity loan Amount Bought for £200,000 20% Borrowed £40,000 Sold for £250,000 20% Pay back £50,000 You can pay back part or all of your loan at any time. The smallest repayment you can make is 10% of the market value of your home. Example Market value of your home Percentage Amount Bought for £200,000 Borrowed 20% £40,000 Value at time of payment £220,000 Paying back 10% £22,000 How to apply Apply through the: Help to Buy agent in the area where you want to live, for England housing association , for Wales

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 in Northern Ireland and 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 .

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Affordable home ownership schemes

Overview

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

You could get:

help with savings, through a low-interest loan (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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