Help to Buy

Help to Buy is a Government scheme which enables you to purchase a property with a deposit of just 5% of the purchase price.

With a Help to Buy Equity Loan, the Government loans you up to 20% of the cost of a new-build home, so you only need a 5% deposit and a 75% mortgage to make up the rest.

Help to Buy equity loans are open to both first-time buyers and home movers on new-build homes worth up to £600,000. You cannot sublet your home, and you must not own any other property at the time of purchasing your Help to Buy: Equity Loan home. Part Exchange deals are also not approved.

Example of a purchase with an equity loan scheme Cost/Percentage

Property purchase price £200,000

Your mortgage £150,000

Equity loan £40,000

Cash deposit £10,000

If the home in the table above sold for £210,000, you’d get £168,000 (80%, from your mortgage and the cash deposit) and pay back £42,000 on the loan (20%). You’d need to pay off your mortgage with your share of the money.

Equity loan fees

You won’t be charged loan fees for the first 5 years of owning your home.  In the 6th year, you’ll be charged a fee of 1.75% of the loan’s value. After this, the fee will increase every year. The increase is worked out by using the Retail Prices Index plus 1%.

Your Help to Buy agent will contact you before the fees start, to set up monthly payments with your bank. You’ll also be sent a statement about your loan each year.

Fees don’t count towards paying back the equity loan.

Applying for an equity loan

If you’d like to buy a home with an equity loan, contact the Help to Buy agent (by clicking on this link you will be taken to an external website; Terry Humphreys Mortgage Services are not responsible for the content of this website) in the area you want to live or contact a participating house builder

Selling your home and paying back the loan

The home will be in your name, which means that you can sell it at any time.  You’ll have to pay back the equity loan when you sell your home or at the end of your mortgage period – whichever comes first. You can also pay back some of your equity loan without selling your home. You can pay back either 10% or 20% or the total amount, so long as the loan is worth at least 10% of the value of your home.



Terry Humphreys Mortgage Services is an Appointed Representative of The Right Mortgage Ltd which is authorised and regulated by the Financial Conduct Authority.

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