Currently the Government’s Help to Buy initiative has two key elements – the Equity Loan and Help to Buy: ISA. Find out how these schemes can help you move.
Help to Buy
The Help to Buy – Equity Loan is a Government-backed scheme exclusive to new build homes. It was set up by the Government in 2013 and has already helped thousands to make their move onto or up the property ladder.
The idea behind scheme is that, with the Government providing a portion of the required equity in the form of the equity loan, homebuyers need to borrow less from traditional lenders and will therefore be able to access more competitive lending rates.
How does Help to Buy – Equity Loan work?
By using the scheme you need just a 5% cash deposit, with the Government providing an equity loan of up to 20% of the value of the property you’re buying. You then need to secure up to a 75% mortgage which opens the door to more competitive lending rates and may make your repayments more affordable than you first thought.
What’s more, you won’t be charged interest or fees on the Government equity loan for the first five years of owning your home, and you can choose to repay the equity loan at any time without penalty, or on the sale of your home.
The scheme is available for first-time buyers and existing homeowners alike, on new homes up to a maximum purchase price of £600,000.
So if you thought a high-quality brand new home was out of reach – think again.