Help To Buy is the new Government scheme to help with the cost of buying a home. The scheme is only open to people living in England -though as discussed elsewhere on this site – there are similar schemes for people living in Scotland and Wales. For more information the Government website offers a really helpful overview here : https://www.gov.uk/affordable-home-ownership-schemes/overview
The Help To Buy Equity Loan is designed to help both first-time buyers and people looking to move from their existing homes. This type of loan is only available for new build properties up to the value of £600,000. Here in summary is how the Help to Buy Equity Loan works.
- The loan is available for 20% of the purchase price of any new build property from a developer signed up the scheme. ( A full list of these will be provided on our blog pages but Rightmove also provide a logo with all registered developers on their site – they also have a useful overview of the scheme here :http://www.rightmove.co.uk/help-to-buy.html )
- The loan is open to homebuyers who can provide a 5% deposit ( in some instances 4% is sufficient ) with the remaining 75% of the loan coming from a mortgage provider.
- The loan is interest free for the first five years of the scheme whereafter a 1.75% fee will be charged in the 6th year. The increase will then be linked to the retail prices index thereafter – a full explanation of which can be found on the government website here : https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-equity-loans
- The loan can be paid when you sell your home or a larger percentage can be paid back during the time of the loan, again check the government website for details.
- To apply for a loan contact your local HomeBuy Agent, a full list of which can be found on the Government website : http://www.helptobuy.org.uk/