A Help to Buy equity loan is part of the Government’s initiative to help both existing homeowners looking to move and first-time buyers trying to get onto the housing ladder. The scheme was started to help make up the difference between a homebuyer’s deposit and the deposit required by lenders before they will consider granting a mortgage.
How the Help to Buy Equity Loan Scheme works:
You put down a 5% deposit and the government loan you a further 20%. This portion is known as the ‘equity loan.’ You would need to borrow the remaining 75% from a mortgage lender in the normal manner. For example, if you bought a new home for £200,000 and you had £10,000 to put down, the scheme would allow you up to £40,000 as an equity loan. Your mortgage would make up the difference, namely £150,000.For more details of this watch the video here.
If you later sold the property for £210,000 in a few years time, you would have made a gain of £10,000 on the home’s value. When you sell the property you’d pay back whatever is still owed under the mortgage and the equity loan provided by the government (£40,000). In addition, you’d pay the government an additional £2,000 which would be their share (20%) of the gross increase (£10,000) in the original home’s value (£210,000 - £200,000).
For more details download the Help to Buy Guide.
Who is eligible for a Help to Buy Equity loan?
The scheme is only available on new build homes up to £600,000 and to be eligible the borrower must not own any other property at the time that they apply for the Help to Buy loan. You cannot rent out the property bought and you cannot part-exchange your existing property for the new one you are buying with the help of the loan.
Mortgage Required have partnered with Help to Buy South. We can quickly arrange loans for the purchase of your new home. To check if you are eligible for a Help to Buy Loan ask us for details.
For more details on the various Government Schemes available through Mortgage Required contact us or speak to a mortgage adviser on 01628 507477.
Related Articles:
- “Help to Buy” Government Loan Scheme now available at Mortgage Required.
- What is the Shared Ownership Scheme?
Related Products:
Download our Free First Time Buyers Guide
Recent posts
Choosing to buy a house is one of the biggest decisions you are likely to make in your lifetime. There are many factors that influence a house purchase, these include: finances, housing market conditions, and mortgage rates.
ISAs: what are they, and which one is for me
3 days ago
Since being launched back in 1999 Individual Saving Accounts (ISAs) have been very popular for those wanting to put money into savings. There are four types of ISA, and the majority allow flexible saving and the ability to withdraw funds easily. There are financial penalties on certain products, these usually pay the most interest.
Benefits of buying a new build home
10 days ago
According to the Office for National Statistics, last year (ending March 2024), there were 153,800 new homes completed in the UK. To help the housing crisis, the UK government has pledged to build 1.5 million new homes in the next five years.
Check out some of the reasons why a new-build home might be for you.
Many households are still being affected by the high cost of living, with several people worrying about how they can make ends meet on a monthly-basis. Unfortunately, the cost of bills including, water, council tax, and energy are still rising. Here are some things you can do.
The Renters’ Rights Bill represents a significant milestone designed to enhance the rights and protections of tenants in the rental market. This comprehensive bill aims to foster a more balanced and fair rental sector, ensuring that tenants can enjoy greater security and equitable treatment. It is likely to become law in late 2025.
Limited Company vs Single Name Buy to Let
7 Feb 2025
Owning a buy-to-let property in your sole name versus through a limited company each has its own set of advantages and disadvantages.
Top 10 property price hotspots in 2024
1 Feb 2025
Data from Rightmove shows that Sunbury-on-Thames in Surrey was the number one house price hotspot in 2024. The prices in this area climbed an impressive 12.5% - increasing from an average price of £527,005 in 2023 to £592,926 in 2024.
Buy to Let Stamp Duty Changes April 2025
29 Jan 2025
On the 31st October 2024 stamp duty for those purchasing additional properties increased by 2% from 3% to 5%.
From 1st April 2025 the threshold will be reducing from £250,000 to £125,000
More information
Trusted by
