Help to Buy scheme example
If you're buying in England ask about the HM Government-backed Help to Buy scheme, and in Wales, it's the Welsh Government's Help to Buy - Wales scheme.
Available to first-time buyers and people already on the property ladder, both schemes require just a 5% deposit and a repayment mortgage of up to 75% of the value of the property. The remaining 20% of the full purchase price is lent to you in the form of an equity loan backed by HM Government for homes in England and the Welsh Government for homes in Wales. You won’t be charged interest on the 20% equity loan for the first 5 years of owning your home.
What is Help to Buy and how can it help you?
Use our calculator guide to find out how Help to Buy: Equity Loan could increase your budget, and help you move house with just a 5% deposit.
How much deposit do you have?
The Government could lend you up to 20 of the home value.
Search for Help to Buy: Equity Loan properties* with your new budget of . Enter your location and then look for eligible plots
Sorry, the Help to Buy: Equity Loan scheme is not currently available in Wales.You can search for homes in this region without Help to Buy here.
Search for Help to Buy: Equity Loan properties* with your new budget of .
Where are the schemes available?
The HM Government backed Help to Buy scheme is available across all Persimmon developments in England up to £600,000. The Welsh Government backed Help to Buy – Wales scheme is available across all Persimmon developments in Wales only on homes up to £300,000.
Can you clarify the equity loan element?
In England, HM Government will provide you with a Help to Buy: Equity Loan up to 20% value of the full purchase price of the property. This loan is interest-free for the first five years. From year six you will be required to pay an interest fee of 1.75% of the amount of your Help to Buy: Equity Loan, rising each year after that by the increase (if any) in the Retail Prices Index (RPI) plus 1%.
In Wales, the Welsh Government will provide you with an equity loan up to 20% value of the full purchase price of the property. This loan is interest-free for the first five years. From year six you will be required to pay an interest fee of 1.75% of the amount of your equity loan, rising each year after that by the increase (if any) in the Retail Prices Index (RPI) plus 1%.
What are the repayment terms of equity loans under the Help to Buy scheme in England or the Help to Buy – Wales scheme?
Under both schemes in England and Wales, you can repay the equity loan any time within the first 25 years (or the term of the mortgage), or when you sell the property. In addition it is also possible to repay part of the equity loan subject to certain limits and criteria.
Are equity loans under the Help to Buy scheme in England or the Help to Buy – Wales scheme available on pre-owned homes?
No, both schemes England and Wales are only available on new-build homes like those built by Persimmon.
Can I use either of the schemes in England or Wales if I already own a home?
Both schemes in England and Wales are available to both first-time buyers and existing homeowners.
Are equity loans under the Help to Buy scheme in England or the Help to Buy – Wales scheme available under a buy-to-let option?
No. Both schemes in England and Wales are only available to purchasers using the property as their main residence.
What types of mortgage are available with equity loans under the Help to Buy scheme or the Help to Buy – Wales schemes?
You must arrange repayment mortgages with both schemes.
Where can I get independent financial advice?
Persimmon can put you in touch with a list of recommended independent financial advisers who can assist you every step of the way.
Help to Buy: Equity Loan - England
Help to Buy: Equity Loan scheme is available on plots in England, with a full purchase price up to £600,000, subject to status. Eligible applicants will be offered an equity loan of up to 20% of the purchase price at the open market value. Applicants are required to fund at least 80% of the purchase price with a conventional main mortgage and minimum of 5% deposit. For the first five years there is no interest charged on the equity loan. At the start of year six, 1.75% interest is payable on the equity loan, which rises annually by RPI inflation plus 1%. The equity loan is provided by the Government's Homes and Communities Agency (trading as Homes England), and held as a second charge on the Help to Buy home. Terms and conditions apply. Applicants should seek independent financial advice, and get information and guidance on applying for a Help to Buy: Equity Loan at www.helptobuy.gov.uk
Help to Buy: Equity Loan - Wales
The Help to Buy: Equity Loan - Wales scheme has specific terms and conditions and is subject to affordability criteria as defined by the Welsh Government. Help to Buy: Equity Loan - Wales scheme is available on plots in Wales, with a full purchase price up to £300,000, subject to status, terms and conditions apply. Help to Buy: Equity Loan - Wales eligible applicants will be offered an equity loan of up to a maximum of 20% of the purchase price (based on the open market value). The registered provider will hold the second charge on the property. Applicants are required to fund at least 80% of the purchase price by means of a conventional mortgage, savings and any deposit where required. Applicants must obtain their conventional mortgage from a qualified lending institution (e.g. a bank or building society). For the first five years there is no fee charged on the equity loan component. At the start of year six a fee is collected of 1.75% of the market value of the property at the time the loan is entered into multiplied by the outstanding percentage under the equity loan, the annual fee of 1.75% will be uplifted by RPI +1% p.a. Visit: beta.gov.wales/help-buy-wales for further information.
**Available on selected plots subject to status. Terms and conditions apply.
A professional legal adviser is required to carry out the legal formalities of buying the home and to represent your interests. Persimmon can provide you with a list of recommended solicitors and/or financial advisers as necessary. Persimmon cannot advise you on a mortgage. The Help to Buy: Equity Loan scheme is subject to availability and may be withdrawn at any time without notice. Not to be used in conjunction with any other purchase assistance scheme, offer or promotion. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE, YOUR EQUITY LOAN OR OTHER DEBT SECURED ON IT. For full details on the Help to Buy: Equity Loan scheme please visit www.helptobuy.gov.uk
Hannah's story - First time buyer
Emily's story - Moving up
Roger's story - Existing homeowner
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For full details on the HM Government-backed Help to Buy: Equity Loan scheme please visit www.helptobuy.gov.uk.
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