‘Help to Buy’ is a Government-backed equity loan scheme to help you buy your new home. With the help of up to 20% equity loan from the government you can buy your home with a 5% deposit.
The Help to Buy Equity Loan scheme is open to both first time buyers and existing homeowners. There is no income cap for applicants and you can buy a new-build property with a value of up to £600,000. The scheme helps you to buy your home with an equity loan of up to 20% of the full price of the property. You won't have to pay any interest charges on this loan for the first five years and you own 100% of your own home from the start. Quick points;
- Available on new build homes up to £600,000 in England and £300,000 in Wales.
- The Government will lend you up to 20% of the property value through an equity loan which can be repaid at any time during the loan term or on the sale of your home.
- In England and Wales, you won’t be charged any loan fees for the first 5 years of owning your home
- You’ll only need to secure up to a 75% mortgage from a bank or building society making that first step a little easier.
- There is a range of competitive mortgage rates available with this scheme so you can find something to suit your budget.
Own Your Home YouTube Channel
Need more information?
Watch some of the helpful video guides from the Government's Own Your Home YouTube Channel.
Am I eligible?
Help to Buy is available to all buyers of new build homes, both first-time buyers and existing homeowners.
What is the maximum property purchase price?
The maximum home purchase price is £600,000.
What is the minimum deposit required?
You will need at minimum deposit of just 5% of the purchase price.
What about my mortgage?
You will need to finance a minimum of 80% of the purchase price (this includes your 5% deposit). If you can afford more than 85% of the purchase price you may not be eligible for Help to Buy assistance.
What about the equity loan?
Buyers will be provided with an equity loan of up to 20% of the value of the property. This will be interest free for the first five years.
What happens after the five years?
On the 5th anniversary of your equity loan an annual fee of 1.75% will be levied, payable on a monthly basis. Thereafter this will rise by RPI inflation plus 1% per annum.
When will I have to pay back the equity loan?
The equity loan is repayable when you sell your home, or after 25 years, whichever is the sooner.
Can I make repayments towards equity loan sooner?
You can make repayments to reduce the equity loan amount at any time. The minimum repayment is 10% of the market value of your home at the time of repayment.
Am I able to get an interest only mortgage using Help to Buy?
No, the scheme is only available with a repayment mortgage.
Can I use Help to Buy for a buy-to-let property?
No, the scheme is only available on owner occupied (i.e. the person who has taken out the mortgage).
What happens if the value of the property falls?
Up to 20% of the property market value is repayable, whether the value is less or more than the original full purchase price.
Terms and Conditions
*Available on selected outright purchases only. Subject to scheme specific units and home types and may not be available on a property you select, ask our sales staff for availability and terms & conditions that may apply.
**Terms and conditions apply. Full details are available from Orbit. YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOAN SECURED ON IT.