What is Help To Buy?
If you’re a first-time buyer in England ready to make the move to an Avant home, the government Help To Buy Equity loan could be everything you need to kick-start your journey. The government lends you up to 20% of the value of your new home and you only require a 5% deposit.
HOW DOES IT WORK?
EXPLAINED: EXAMPLE EQUITY LOAN ON A £200K HOME
• You only need a 5% deposit
• Available for new build homes and for first time buyers only
• The government will lend you up to 20% of the value of the new property
• You will own 100% of your home
• Equity loan is interest free for 5 years
• Affordable monthly mortgage payments
HOW DO I PAY OFF A HELP TO BUY LOAN?
You won’t be charged loan fees for the first 5 years of owning your home. In the 6th year, you’ll be charged a fee of 1.75% of the loan’s value. After this, the fee will increase every year for up to 20 years. The increase is worked out by using the Retail Prices Index plus 1%.
Eligibility and availability is subject to terms and conditions, please speak to your Sales Advisor for more information on homes that are available with Help to Buy.
Find your Help to Buy agent via: Find a Help to Buy agent - Own Your Home - Own Your Home
More information can be found via: Home | Own Your Home
Help to Buy: Equity Loan (2021-23), England. First-time homebuyers who meet affordability and lending terms can borrow an equity loan of up to 20% (40% in London) of the sale price of a new build home. How much you can spend on your home will depend on which region it is in. North East £186,100; North West 224,400; Yorkshire and the Humber £228,100; East Midlands £261,900; West Midlands £255,600; East of England £407,400; London £600,000; South East £437,600; South West £349,000. You must fund at least 80% (60% in London) of the sale price with a mortgage and at least a 5% deposit.
Pay no interest on the loan for the first 5 years. Interest fees start at 1.75% and rise each year in April by the Consumer Prices Index (CPI) plus 2%. You pay a monthly management fee of £1 for the life of the loan. Homes England, the lender, secures the equity loan as a second charge on your Help to Buy home. You must repay the equity loan when you sell the home or pay off your mortgage. You can repay all or part (10% to 30%) of the loan any time before then. An independent financial adviser and a solicitor may be able to help you decide if Help to Buy is right for you.
Your home may be repossessed if you do not keep up repayments on your mortgage, equity loan or other loans secured against it.