HELP TO BUY EQUITY LOAN
The Help to Buy Equity Loan scheme can assist you in buying your first home or upsizing your existing one with only a 5% deposit supported by a further 20% from the Government.
How does the Help to Buy Equity Loan work?
With a Help to Buy Equity Loan, the Government lends you 20% of the cost of your home (or up to 40% for London). You can therefore buy your first home with as little as 5% deposit and apply for a 75% mortgage. This equity loan significantly reduces your monthly mortgage payments in the first 5 years and should give you access to lower mortgage rates as you only need to borrow 75% of the property value from the lender. Historically 75% mortgage rates have been far more competitive than the 95% options. Contact Fairview Financial to discuss your mortgage options and our experienced brokers will search across the market to find you the most competitive rates.
You will not be charged interest on the 20% loan for the first 5 years of your mortgage. After this you will only pay interest on the original loan amount. For example, if your loan is £20,000 but you owe £25,000 after 5 years because your house price increases, interest is only charged on the original £20,000.
The loan can be paid back either at the end of the mortgage term, or when the property is sold, whichever comes first. The amount you pay back depends on the market value of your property. You are able to pay back part or all of the equity loan at any time during the mortgage term, as long as any repayment you make is at least 10% of the market value of your home.