The Help to Buy Equity Loan Scheme replaces the existing FirstBuy scheme as of 1st April 2013. It is available to those purchasing new homes only and up to the value of £600,000.
How it works is that the Government will fund (via the Homes and Communities Agency) 20% of the purchase price with an equity loan. As the name suggests this loan will need repaying however for the first five years no repayments have to be made. After five years interest will be charged at 1.75%, rising annually by the increase (if any) in the Retail Price Index (RPI), plus 1%. The remaining 80% of the property is to be funded via a mortgage and a deposit. Usually the mortgage provider will need a deposit to be paid by the borrower of 5% of the property value.
Remember this Help to Buy scheme is for new build homes only, it is open to all buyers not just first time buyers.
For more information and to discuss your eligibility then please call Richard on 01252 759 233 or contact us here.
A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.