Advice on Help to Buy

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Government Help to Buy Equity Loan Scheme

The Help to Buy Equity Loan scheme means you could move with just a 5% deposit. Available to both first-time buyers and existing home owners, Help to Buy makes buying a property more affordable, with a much lower deposit than would otherwise be required. The Help to Buy Equity Loan scheme is available for new homes only.

How it works

The Help to Buy scheme reduces the deposit required by the buyer to just 5%. In addition to this, the government will provide an equity loan of up to 20% of the property value, which contributes towards your house deposit. This makes your total deposit 25% of the property’s value, leaving you to secure a mortgage for the remaining 75%.

The details

Help to Buy means you have 100% ownership of your property. The government equity loan is interest-free for the first 5 years and can be paid off at any time, or on the sale your property. The scheme is only available for new homes up to a maximum value of £600,000.

As of 31st December 2016, buyers may only use Help to Buy for new-build homes using the Equity Loan scheme. Since starting in October 2013, the scheme has helped over 100,000 people buy a home. With a wide range of competitive high loan-to-value loans now available, in September 2016 the Bank of England decided that the Help to Buy Mortgage Guarantee scheme was no longer necessary, and terminated it at the end of 2016. The Help to Buy Equity loan scheme, which is available for new-build homes, will remain available until 2020.

Summary

  • Available to all home buyers
  • Available on new-build homes only
  • Must be your only property
  • Buyer contributes a minimum 5% deposit of the property value
  • Government will lend up to 20% of the property value through an equity loan (or 40% of the property value in London)
  • The loan is interest-free for 5 years and can be repaid at any time or on the sale of the home
  • Available on new-build homes up to £600,000 in England

Start saving with the Help to Buy ISA

If you are saving for your first home, open a Help to Buy ISA and the government will add a 25% bonus to your savings – up to a maximum bonus of £3,000. You can open your ISA with a deposit of up to £1200, and then save up to £200 a month. So, if you save the full £200 a month, that’s an extra £50 a month from the government. To find out more about the Help to Buy ISA, visit the government’s website here, and try their handy calculator to see how much you could save.

Buy your new home now

With Help to Buy all you need is a 5% deposit and, with competitive mortgage rates currently available, now is a fantastic time to buy. So, whether you are looking to get on the property ladder, or want more space for the family, Help to Buy makes moving more affordable.

Talk to us today about Help to Buy and buying your next home with us. If you are a first-time buyer, simply click here to arrange a chat with your local branch. Or, if you are looking to move, book a free property valuation with us here.