Help to Buy: Equity Loans

Last updated - 1 November 2017

A helping hand from the government
Help to Buy Equity loans are a government-backed scheme aiming to help first time buyers enter the property market. The government will lend the buyer up to 20% of the value of their new build to enable them to buy. The buyer only needs a 5%deposit, and a 75% mortgage to make up the rest.

How does it work?

Help to Buy Equity Loans make getting on to the housing ladder more accessible to some by reducing the amount required for a deposit when compared to buying a property on the open market. Another benefit of a Help to Buy Equity Loan from the government is that with a larger amount to put down, the buyer will hopefully get a better mortgage rate from the mortgage provider.

The Help to Buy Equity Loan is interest-free for five years. After that, the buyer pays an annual fee of 1.75% on the amount of the outstanding loan. The fee will increase each year by inflation (Retail Price Index RPI) + 1%.

The buyer can start repaying the equity loan after they’ve owned the home for a year, but they’ll need to be able to pay a minimum of 10% of the property value at the time of repayment.

When they want to sell their home, they’ll need to repay the percentage equity loan that is still outstanding. So, for example, if they originally bought 80% of the property and they hadn’t repaid any of the equity loan, their repayment on selling would be 20% of the market value at the time when they sell.

Am I eligible?

To be eligible for Help to Buy Equity Loans:

  • You must be at least 18 years old
  • There is no maximum household income level
  • You will normally require at least a 5% deposit of the full purchase price
  • You must take out a mortgage which will need to be for 25% or more of the full purchase price
  • If you are a home owner already, you must have sold your current home before or at the point of completion on your Help to Buy home
  • Part Exchange is not available through this scheme
  • You cannot rent out your existing property to buy a second home through Help to Buy
  • You cannot sublet your Help to Buy home
  • You cannot buy a home on sale for more than £600,000

Homes available: Help to Buy

Genesis has a range of homes in London and the South East available to buy via the Help to Buy: Equity Loan scheme.

Visit our Homes for sale page to view all homes we have available or contact our Sales Team on 020 3797 4261 to find out more.