Help to Buy equity loan
You can get a low-interest loan towards your deposit. This is called an equity loan.
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.
|For a £200,000 property||Amount||Percentage|
|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).
|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.
|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: