Help to Buy Scheme

A Helping Hand on to the Property Ladder…

The Help to Buy mortgage scheme was first launched in 2013. It is available to First Time Buyers and Home Movers purchasing new-build homes only.

The buyer is required to raise a minimum of 5% of the property value as a deposit. The Government will then provide a further loan of up to 20% (up to 40% in the London area). With an overall deposit of 25% (45% in London) we are then able to source much more attractive mortgage rates at 75% loan to value (55% LTV) from those Lenders participating in the scheme.

The property purchased must also be your only residence.

For the first 5 years the Government loan is interest free. In year six you will be charged 1.75%. That will climb at a rate of 1% of that figure plus any increase in the Retail Price Index (RPI) every year thereafter.

You can choose to repay all or part (min 10%, as long as the loan is worth at least 10% of the value of your home) of the Government loan at any time with no penalty. If you haven’t repaid any of the equity loan and decide to sell the property and leave the scheme the Government will reclaim it’s 20% (40% London) stake in your home at it’s current value.

Due diligence will need to be carried out not only with the proposed new Lender but also with the local Help to Buy association liaising with the Government.

Help to Buy
The government has created the Help to Buy schemes including Help to Buy: Shared Ownership and Help to Buy: Equity Loan to help hard-working people like you take steps to buy your own home. The Help to Buy: ISA pays first-time buyers a government bonus. For example, save £200 a month and we’ll add £50, up to a maximum of £3,000, boosting your ISA savings of £12,000 to £15,000.

Information sourced from  December 2018.