Help To Buy Properties England

With a Help to Buy: Equity Loan the government will lend you up to 20% of the cost of your newly built home. You pay a deposit of 5% or more and arrange a mortgage of 75% or more to make up the rest. You won’t be charged interest on the 20% loan

Paying back the equity loan

For the first five 5 years:
The equity loan is interest free
You pay a £1 monthly management fee by Direct Debit

From Year 6:

  • you continue to pay the £1 monthly management fee
  • you start to pay a monthly interest fee of 1.75% of the equity loan
  • your interest fee will rise each year in April by the Regional Price Index (RPI) plus 1% until you repay your loan
  • You only need to repay the equity loan in full when you:

– Pay off your mortgage
– Sell your home
– Come to the end of your equity loan term.

But you can choose to pay off your equity loan any time, in full or in 10% chunks before the end of the loan period.
The amount you borrow is a percentage of the value of your new home. And the amount you pay back is the same percentage of the value of your home.
This means, if the value of your home rises, so does the amount you owe on your equity loan. It works both ways, so if the value of your home falls, the amount you owe on your loan falls too.

Example: Repaying a 20% equity loan where the home has increased in value.
Buy your home for £200,000
Sell your home for £210,000
Repay your 20% equity loan, £42,000
Pay off your 75% mortgage, £150,000

To find out more about Help to Buy: Equity Loan visit