Help To Buy

In 2013 the Government introduced 2 schemes which are to help people with a lower deposit to buy a property.

Below are the main features of those different schemes:

1. Help to Buy – Equity Loan:

• minimum 5% deposit
• loan from a government agency – up to 20% of the value of the property (no interest charged in the first 5 years)
• maximum value of the property – £600,000
• only new properties
• mortgage required – up to 75% of the value of the property

2. Help to Buy – Mortgage Guarantee:

• minimum 5% deposit
• new-build and older properties
• maximum value of the property – £600,000
• loan from a government agency – none
• mortgage required – up to 95% of the value of the property

An example of costs involved when buying in the first scheme Help to Buy – Equity Loan:

1. Value of the property – £200,000

• our deposit – £10,000 (5%)
• government loan – £40,000 (20%)
• mortgage – £150,000

In case you sell the house after 3 years for £220,000, you will have paid off £44,000 of the government loan – 20% of the value of the property on the date the transaction was done.