Can Help to Buy Help You?
22 January 2018
Amberley Park, Tetbury (Bewley Homes)
Who is eligible?
Help to Buy equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy must be newly built with a price tag of up to £600,000.
You won’t be able to sublet this home or enter a part exchange deal on your old home. You must not own any other property at the time you buy your new home with a Help to Buy: Equity Loan.
How does it work?
With a Help to Buy: Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
You won’t be charged loan fees on the 20% loan for the first five years of owning your home.
In the 6th year you will currently be charged a fee of 1.75% of the loan’s value. After this, the fee will increase every year in line with inflation. The annual increase in the fees is worked out by using the Retail Prices Index (RPI) plus 1%.
For instance: Years 1-5: no fees, Year 6: 1.75% of the loan, Year 7 onwards: 1.75% + RPI + 1%. These fees do not go towards paying off the government loan. However the larger the deposit you put down, the more mortgage products you’ll have available and generally speaking, the bigger the deposit, the better the mortgage deal.
Various new developments across our region have signed up to the Help to Buy scheme, including: