Help to Buy equity loans from the Government help buyers who would otherwise find it difficult to find a 10% deposit. You may be eligible whether you are a first time buyer or an existing homeowner.
The Government lends the buyer up to 20% of the purchase price so they only need a 5% cash deposit and a 75% mortgage from a qualifying lending institution (e.g. a bank or building society). In return for the ‘Help to Buy loan’, the Government takes a share of the future sale proceeds equal to the percentage contribution at the time of purchase.
For the first five years there are no fees to pay: after that buyers pay an additional interest of 1.75% p.a. on the outstanding Help to Buy loan. After that this fee increases annually by the increase in the Retail Price Index (RPI) plus 1%. The Help to Buy loan itself must be repaid after 25 years, or earlier if you sell your home.