The government help to buy scheme, offers first time buyers an equity loan and can only be used to buy your main residence and is for new build properties only. You will need minimum of 5% deposit in savings or from the bank of Mum and Dad and the maximum purchase price will depend upon which region of England you live in.
Regional Price Limits
There are price limits on homes you can buy with an equity loan. The limit is different for each region in England.
Region | Full property price limit |
---|---|
East | £407,400 |
East Midlands | £261,900 |
London | £600,000 |
North East | £186,100 |
North West | £224,400 |
South East | £437,000 |
South West | £349,000 |
West Midlands | £255,600 |
Yorkshire and the Humber | £228,100 |
How the help to buy equity loan works
- The purchaser requires minimum 5% deposit
- The government can lend up to 20% (40% in London) of the agreed sale price up to a maximum of the regional limit (see table)
- Apply mortgage for the remaining 75% (or 55% in London), from help to buy mortgage lender
- You repay the same percentage of the proceeds of your sale as the initial equity loan. I.e. if you borrow 20% and this equated to £20,000. Then if you sell at £200,000, your 20% will be equivalent to £40,000
- Equity loans are interest free for the first 5 years
- After 5 years you will be charged interest at 1.75%. After the 6th year interest will increase by the consumer price index (CPI) +2%. Note, if you took out your loan prior to December 2019 it is CPI +1%
- Equity loans must be repaid on sale of the property or after a period of 25 years.
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Head Office: 01462 613030
info@boudicasland.co.uk
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