THINKING OF BUYING A NEW BUILD? OUR ADVISORS CAN ASSIST WITH YOUR HELP TO BUY MORTGAGE!
The government equity loan scheme can help you secure that dream home you didn't think was possible. If you're a First Time Buyer, you may be eligible to apply for the Help tp Buy equity loan to purchase a brand new home. Call us today on 0330 133 2981!!
Help to Buy Equity Loan scheme (2021-2023)
Help to Buy is an affordable purchase scheme launched by the government in April 2013 to help drive and support the demand for new homes in England. The main aim of the scheme is to enhance the access to new homes for first time buyers by making them more affordable. The government will lend up to 20% of the value of a new home (40% in London) to boost your deposit. You will be required to contribute a minimum of 5% yourself and secure a mortgage for the remaining balance. Your first step is to speak to an Advisor to find our how the scheme really works.
The new scheme runs until 2023, but the government have price caps that vary by region in England (view price bands by region here).
Equity Loan price caps by region: 2021 - 2023
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
What is Help to Buy?
Help to Buy means you can apply for a mortgage with a 5% deposit – the government provides a loan (called an equity loan) of up to 40% for London properties or 20% outside London (the limit is 15% in Scotland). You then borrow the rest of the purchase amount as a mortgage from one of the many mortgage providers we have access to. The government loan means you borrow less from the mortgage provider, giving you a wider range of mortgage rates to choose from because your loan-to-value ratio is lower. Loan-to-value is the ratio of your mortgage amount against the full purchase price of the property. Generally speaking, the lower the loan-to-value, the lower the interest rate on your mortgage.
Who’s eligible for a Help to Buy equity loan?
To be eligible for a Help to Buy equity loan, the property you are buying needs to be a new-build costing no more than £600,000 (London only, see table above for regional price caps) that you’ll be living in as your main residence. You need to be a first-time buyer an all purchasers will be required to pass a Housing & Communities Agency (HCA) affordability check. There is no annual household income limit, but you must pass affordability check, be buying a new-build property and be a first time buyer. We can guide you through the process so call and book a consultation today.
how do you repay the loan?
Your government equity loan is interest free for the first five years, but you will pay a £1 management fee every month by direct debit. Your Help to Buy Administrator will help to set this up. From year six, you will pay interest on the loan at a rate of 1.75%, rising annually by CPI inflation plus 2%. The equity loan can be repaid at any time within the term of the mortgage. This can be done via savings, raising capital against the property (re-mortgaging) or on sale of the property. At this point the property will be revalued and you will repay 20% of the value of the property at this time. Therefore you could repay more than you initially borrowed, but you could pay less if the property value falls.
For advice on Help to Buy (Shared Equity/Equity Loan scheme), please call 0330 133 2981 or email
All of our advice is impartial and tailored to you. We have no ties to any particular lender and will find the best mortgage for you.
evenings & weekends
We know our customers lead busy lives so we are available to talk at weekends and evenings during the week.
no advice fees
We don't charge any advice fees, helping you to keep the cost of buying or moving to a minimum. Every penny counts.
how to apply for the equity loan?
Before you get started, you'll need to make sure have the following in place;
- funds in place to pay your reservation fee to the developer (up to £500) -
- a 5% deposit at exchange of contracts (if you have more than 5%, pay the rest on completion -
- funds in place to cover other fees; solicitors, mortgage fees and stamp duty (if applicable) -
You should also seek financial advice to ensure that the equity loan is right for you and you meet all of the affordability checks required for your application and for the mortgage you require. We will guide you through the application process with the relevant Help to Buy Agent and ensure all documents are ready to make sure your Authority to Proceed is issued promptly.
Call us now to arrange a no obligation consultation with one of our experienced advisors.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE