Help to Buy is the brand for the government-funded initiative of affordable home ownership schemes. These are designed to help people who cannot afford to buy a home that suits the needs of their household.
The Help to Buy scheme is made up of two parts:
- an ‘equity loan’, where the government will lend you up to 20% of the value of your newly-built home
- a ‘mortgage guarantee’, where the government will guarantee part of your mortgage if you only have a small deposit
This option is available to all those who aspire to own a new-build home, but struggle to access or afford the repayments on a low-deposit mortgage. It is available to all homebuyers (not just first time buyers).
Key points
- The government will lend the client up to 20% of the value of the property through an equity loan, which can be repaid at any time or on the sale of the home.
- The maximum full purchase price is £600,000.
- There are no payments on the loan for the first five years.
- After five years, there is a fee of 1.75%, which increases annually in line with RPI plus 1%.
- The client will need to obtain a mortgage to purchase through this scheme.
- The client will need a minimum of 5% deposit.
A further element of the Help to Buy scheme is the government-backed mortgage indemnity guarantee scheme. This became available to lenders to help them provide more mortgages to all types of homeowners who can’t afford a big deposit.
Key points
- Can be used towards a newly built home or an existing property.
- The client will need a 5% deposit.
- Available to existing homeowners as well as first-time buyers.
- The maximum full purchase price is £600,000.
If you want to buy using the help to buy scheme then please call Downton and Ali on 020 3021 0075 and we will be glad to help.