The Help to Buy scheme is an equity loan provided by the Government.
They lend you up to 40% of the cost of your new build home, so you will need a minimum 5% deposit and a 55% mortgage to make up the rest.
You would need to pay off your mortgage with your share of the money.
How does a help to buy equity loan work?
With a Help to Buy: Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years of owning your home.
Can you use the help to buy ISA and equity loan?
Yes. You can use your Help to Buy: ISA with other Government schemes, like the Help to Buy: Equity Loan scheme (subject to meeting the eligibility requirements of the other scheme/s you wish to participate in).
Do you have to pay back help to buy?
Borrowers can choose to repay the equity loan at any time, without penalty. You can pay back either 10% or 20% of the total amount, so long as the loan is worth at least 10% of the value of your home. The Equity Loan part of Help to Buy only applies to properties worth up to £600,000.
How do you qualify for help to buy?
You can use the Help to Buy: ISA with other government schemes, including the Help to Buy: Equity Loan scheme and Shared Ownership.
To qualify for a Help to Buy: ISA you must:
- be 16 or over.
- have a valid National Insurance number.
- be a UK resident.
- be a first time buyer, and not own a property anywhere in the world.