The Help to Buy scheme is a new government initiative that is designed to help first-time buyers get on the property ladder. The scheme provides eligible households with an equity loan of up to 20% towards the purchase price of newly built properties costing up to £600,000.
The Government will lend you up to 20% of the cost of your new home through a Help to Buy: Equity Loan, so all you need is a 5% cash deposit and a 75% mortgage.
For the first five years after purchasing your residence, you will not be charged loan costs.
For a property worth £200,000, for example, If the home in our example above sold for £210,000, you’d receive £168,000 (80% from your mortgage and the cash deposit) and would owe £42,000 on the loan. You’d be responsible for paying off your mortgage in full with your share of the proceeds, and the equity loan would be wiped out.
The Help to Buy scheme is available on new build properties that are up to £600,000 in England. If you want to buy a property that is more expensive than this, you will need to find a larger deposit. The scheme is not available in second-hand homes, so you will need to buy a brand new property from a developer that is registered with the Help to Buy scheme.
What are the help to buy price caps in England?
If you are interested in taking advantage of the Help to Buy scheme, you can speak to our team of mortgage advisors to see if you are eligible and to find out more about how the scheme works. You can also visit the Help to Buy website for more information.
Help to Buy – London
The government is raising the upper limit for the equity loan it gives new housebuyers in London from 20% to 40 percent beginning February 2016 to reflect present property prices. See more at:https://www.helptobuy.gov.uk/equity-loan/equity-loans/#sthash.uvpr8X
