Help To Buy Equity Loan Scheme 2021 - 2023 Explained
What is Help to Buy?
- An equity loan provided by the Government, which only applies to registered new build homes in England.
- Available to all First Time Buyers with a min 5% deposit. However it must be the only residence.
- The government will lend a maximum of 20% (up to £120,000), 40% in London (up to £240,000) on a property value up to £600,000.
- Regional property price caps are in place. For London the maximum property value is £600,000
How does Help to Buy work?
- You’ll work with your local agent to get approval before proceeding with the buying process.
- Once you’ve found a property, you need to fill out a Property Information Form (PIF). This confirms purchase price, mortgage, deposit, and household income. The PIF must be sent to the local Help to Buy (HTB) agent.
- Within 4 working days of submitting the PIF, you’ll then receive an Authority to Proceed.
- You must then take out a mortgage of at least 25% of the value of the property to purchase.
- You don’t need to start repaying the loan for 5 years, but it must be repaid in 25 years.
- After 5 years, an interest fee of 1.75% applies to the loan. This fee is not considered part of the repayment of the loan and therefore does not reduce amount owed.
- Interest rates will rise each year in April by Consumer Price Index (CPI) plus 2%.
Can you afford Help to Buy?
One time payments:
- Reservation fee (if required) up to £500.
- At least 5% deposit.
- Fees upon completion: stamp duty (if not first time buyer), legal fees.
One time payments:
- £1/month management fee to Homes England. This fee is not considered part of the repayment of the loan and therefore does not reduce amount owed.
- After five years, there are repayments on loan (+ interest) on top of monthly mortgage payments.
- It is advised that monthly costs (mortgage, fees, and service charges) are no more than 45% net disposable income.
Properties available through Help to Buy
View our new developments available through Help to Buy and enquire to find out more.
- Homes England has an entitlement to share future sale proceeds equal to the percent contribution if the buyer sells the property before the loan is fully paid off.
- HTB cannot be used by buy-to-let investors or those looking to rent out a second property.
- NB: From 1st April 2021, all buyers must be first time buyers.
- HTB cannot be used if you have previously owned a home or residential land in the UK or abroad.
*The Help to Buy scheme has specific terms and conditions and JLL cannot guarantee eligibility to the scheme. JLL does not offer financial advice and you should take advice from a suitably qualified advisor. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debts secured on it.