The Help to Buy Equity Loan scheme enables you to receive an Equity Loan from the Government for up to 20% of the cost of your newly built home (or 40% if you are buying in Greater London), so you only need to put in 5% cash deposit and take out a mortgage on the remaining 75% (or 55% in Greater London).
There is no interest charged on the Equity Loan for the first 5 years.
- Years 1-5: no fees
- Year 6: 1.75% of the loan
- Year 7 onwards: 1.75%+RPI (Retail Price Index)+1% These fees do not go towards paying off the government loan.
The equity loan must be repaid after 25 years, or earlier if you sell your home. You must repay the same percentage of the proceeds of the sale as the initial equity loan, so if you received 20% of the purchase price then you must repay 20% of the future sale.
Mortgage Superheroes can talk you through the process, assess your eligibility, complete the application for your Equity Loan and liaise with your Help to Buy Agent to ensure your mortgage application progresses as smoothly as possible.