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
The top 10 most beautiful villages in the world
12 days ago
Forbes has published a global ranking of stunning locations and one popular picturesque corner of the UK has nabbed top spot.
Over three years after the Mini-Budget took place, we look at what the mortgage market looks like now, showing the difference in mortgage repayments.
The government has announced plans to make buying or selling a home cheaper and quicker with what is being called the “biggest shake-up to the homebuying system in this country’s history.”
More borrowers using equity release
1 Oct 2025
Almost one in five equity release mortgages are now taken out to provide financial support to family.
Buyers purchasing properties sooner
29 Sep 2025
According to industry data, the expected wait for those looking to buy a property has dropped from just over 11 months to less than six months.
It is common for your first mortgage payment to be higher than your subsequent monthly payments for two reasons.
What to do just before you get your keys
24 Sep 2025
Firstly, a big congratulations, you’ve now exchanged contracts! After weeks and months of waiting, you are about to move in. What should you do first?
The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.
More information
Trusted by
