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Help To Buy

The Help to Buy Equity Loan scheme is a loan from the Government available to first time buyers who want to purchase a new build home with the help of an equity loan.

The scheme is only available for select new build properties in England and not the rest of the UK.

You must buy your home from a homebuilder who has registered homes on their developments for the Help to Buy: Equity Loan.

You can borrow a minimum of 5% and up to a maximum of 20% (40% in London) of the price of a new-build home, the buyer funds a 5% deposit, and the remainder would be through a mortgage.

The amount you pay for a home depends on where in England you are buying. The Help to Buy Equity loans has a price cap that gives the maximum price that can be used for the Help to Buy Equity Loan in an area.

Help to Buy: Equity Loan Price Caps – April 2021 to March 2023

RegionMaximum Property Price
North East £186,100
North West £224,400
Yorkshire and the Humber £228,100
East Midlands £261,900
West Midlands £255,600
East of England £407,400
London £600,000
South East £437,600
South West £349,000

Help to Buy Equity Loans make getting onto the housing ladder more accessible by reducing the amount of deposit required when compared to buying a new build property on the open market. For example, buying a property valued at £250,000 on the open market would require a minimum deposit of £37,500 whilst under the Help to Buy scheme this reduces to just £12,500. Another benefit of the scheme is that the combination of the equity loan and the personal deposit enables a larger amount to be put down, which will generally enable the lender to offer a better mortgage rate.

In a typical transaction with a property worth £250,000 the Help to Buy Equity Loan scheme would break down like this:

  • £50,000 Help to Buy Equity Loan (provided by the government)
  • £12,500 purchaser deposit (paid from savings/family gift)
  • £187,500 mortgage (from a lender that supports the scheme)

You will pay a monthly management fee of £1 when you take out the equity loan until you pay it off.

The Help to Buy Equity Loan is interest-free for the first 5 years and after that, from year six the purchaser pays an annual fee of 1.75% on the amount of the outstanding loan. The fee is paid monthly and will increase every April by adding the Consumer Price Index (CPI) plus 2%..

The monthly interest payments you make do not pay off your equity loan. You do not pay monthly equity loan repayments to reduce the amount of equity loan you have borrowed.

An equity loan is secured against your home by a legal charge in the same way a repayment mortgage is.

Help to Buy: Equity Loan is exempt from regulation by the Financial Conduct Authority.

You’ll also have to pay other fees associated with buying and owning a home, for example, legal and mortgage arrangement fees and for market value reports.

The equity loan can be repaid in part or full after the property at any time. This is subject to a minimum 10% of the property value being purchased at the time of repayment. Equally, there is no compulsion to repay the equity loan until the property is sold.

 You must repay your equity loan in full:

  • at the end of the equity loan term
  • when you pay off your repayment mortgage
  • when you sell your home
  • if you do not comply with the terms set out in the equity loan contract and we ask you to repay the loan in full.

Paying back your equity loan

The price you pay will be determined by a RICS valuation at the time you wish to pay back part of the loan so the equity loan you repay could be higher or lower than the initial equity loan you received.


Market Value of your homeEquity loan PercentageAmount
Bought for £200,000Borrowed 20%£40,000
Value at repayment £220,000Payback 20%£44,000
Value at repayment £180,000Payback 20%£36,000

Paying back part of your equity loan

The smallest repayment you can make is 10% of the market value of your home. Paying back part of your equity loan will reduce the monthly interest payments you’ll need to pay from the sixth year of taking out the equity loan.

Paying back all your equity loan

You must repay all your equity loan when you:

  • reach the end of the equity loan term (normally 25 years)
  • pay off your repayment mortgage
  • sell your home

You may also be asked to repay the equity loan in full if you do not keep to the terms and conditions.

If you sell your home, you’ll pay the equity loan percentage of the market value or agreed sale price if it’s higher.

If you want to pay off your equity loan and you’ve previously made part repayments, you’ll pay the equity loan percentage you still owe of the market value.

To be eligible for a Help to Buy: Equity Loan (2021-2023):

  • you must be a first-time buyer
  • buying a new build home
  • the new build home you buy must fall within the relevant regional price cap.

If you are married, in a civil partnership, or living with a partner as if you were married, you will have to make a joint application with your husband, wife, civil partner or partner.

You and anyone you’re buying a home with must:

  • not own a home or residential land now or in the past in the UK or abroad
  • not have had any form of sharia mortgage finance.

You must tell us if you or anyone you are buying with has a connection with a homebuilder, as this could affect your eligibility for the equity loan scheme.

You are not allowed to sublet your home without Homes England’s consent.

To apply for Help to Buy: Equity Loan (2021-2023) you must:

  • have a deposit of at least 5% of the purchase price
  • reserve a new build home with a registered Help to Buy homebuilder
  • arrange a repayment mortgage of at least 25% of the purchase price. This is separate from the equity loan
  • be able to afford the repayments on the equity loan, your repayment mortgage, and other outgoings.
  • sign a legal declaration to confirm that you are a first-time buyer. Your conveyancer will explain this to you

If you make a fraudulent claim for a Help to Buy: Equity Loan you may be liable to criminal prosecution. You will also have to pay back the equity loan.

Help to Buy

Agent for the North tel. 0300 790 0570 Email.

Agent for the Midlands & London  tel. 03333 214 044 Email.

Agent for the South tel. 0800 456 1188 Email.

Help to Buy Mortgage Guarantee

The Help to Buy Mortgage Guarantee scheme can help with the purchase of either a newly built or an existing property anywhere in the UK.

The scheme works like this:

  • A minimum personal deposit of 5% is required
  • Up to 95% of the property’s price may be borrowed from a mortgage lender that supports the scheme
  • The government will provide a guarantee to the lender for any mortgage borrowing above 80% of the property’s value
  • The maximum purchase price is £600,000
  • The scheme can’t be used in conjunction with shared ownership or shared equity purchases nor can it be used with any other publicly funded product
  • The property can’t be a second home, nor can it be rented out after purchase
  • The scheme is not restricted to first time buyers and there’s no limit on the level of income

The mortgage guarantee is provided to the lender, not the purchaser. For the purchaser, it is no different to any other mortgage with responsibility for repaying the whole loan and the prospect of repossession in the event of missed repayments.

For the lender, this will mean that lending to people with small deposits will carry much less risk, so it should create more choice for borrowers. However, the scheme provides lenders the freedom to set their own interest rates, so there are no guarantees they’ll offer a more attractive rate.

Censeo Financial is a trading name of Censeo Ltd who are an Appointed Representative of PRIMIS Mortgage Network, a trading name of First Complete Ltd. First Complete Ltd is authorised and regulated by the Financial Conduct Authority for mortgages, protection insurance and general insurance products. Censeo Limited is registered in England and Wales, company registration number 06453977, the Registered Address 11b Newton Court, Pendeford Business Park, Wolverhampton, WV9 5HB.

We will charge a broker fee of up to £445, payable on application. The amount we will charge is dependent on the amount of research and administration that is required.

Your home may be repossessed if you do not keep up repayments on your mortgage.

The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.

Most Buy to Let Mortgages are not regulated by the Financial Conduct Authority.

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