What is Help to Buy?
The Help to Buy scheme is great for first-time buyers! It means your dream home is closer than you think.
It is designed to help first-time buyers purchase a newly-built home. Under this scheme, all you need is a 5% deposit and you can borrow 20% of the purchase price interest-free for the first five years*. If you live in London, you can borrow up to 40% of the purchase price, which goes a long way towards the final cost.
Equity Loan: First Time Buyers
The Help-to-Buy Equity Loan gives First Time Buyers a lift on to the property ladder by making the purchase more affordable. Under this scheme the Government will lend you 20% of the purchase price interest-free for the first five years. You then only need a 5% cash deposit and a 75% loan-to-value mortgage to make up the rest. With a larger deposit, you then have access to more attractive mortgage rates than on a higher loan-to-value mortgage of 80-90%.
If you can’t afford a 100% mortgage on your own then shared ownership allows you to buy a share of your home (between 25-75% of the property value) and then pay rent on the remaining share. You can then choose to buy more shares later on to increase your ownership when you can afford to.
Equity Loan: London
If you’re looking to move to London, the London Help-to-Buy Equity Loan scheme helps First Time Buyers with a 40% Government loan due to higher house prices. Under this scheme, the Government will lend you 40% of the purchase price interest-free for the first five years. You still only need a 5% cash deposit and then a 55% loan-to-value mortgage to make up the rest.