How does Help to Buy work?

12th March 2020

Help to Buy is an equity loan scheme provided by the government to help first-time buyers and existing homeowners get into a brand-new home in a more affordable way and just a 5% deposit.

The conditions are that the new-build property must be less than £600,000, your only property and you cannot rent it out to tenants. You can borrow 20% of the purchase price (40% in London) and make up the rest of the price through your deposit and a repayment mortgage. The loan will be interest free for the first five years as long as your deposit is at least 5% of the purchase price. In year six, you’ll be charged 1.75% and, after that, fees will rise by inflation linked to the Retail Prices Index (RPI) plus 1% each year.

The government’s equity loan element must be repaid after 25 years – earlier if you sell your home in that time. When you sell your home, you must repay the same percentage of the proceeds of sale as you borrowed, for example, if you borrowed 20% as your equity loan, you’ll repay 20% of the proceeds of your sale.

If you’d like to know more about Help to Buy or have found a new-build home that you need a mortgage for, talk to our expert team of mortgage advisers and we’ll guide you through the process. Call us on 08454 500200 or click here to make an enquiry.

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Without Julie we would not have been able to purchase our first home.

Ours was a challenging case; we wanted to live in Winchester as first-time buyers with an unusual income situation. We found the ideal property for us at auction.

Julie was amazing. From our first meeting, and throughout all subsequent meetings, Julie re-assured us and made us aware of all the information we needed to make the correct decisions at that time.

As first-time buyers attempting to purchase a property unconventionally, Julie worked tirelessly. We had frequent contact on late evenings and weekends to not only help us secure an application in principle quickly before the auction but also to secure us our actual mortgage after we had won our property.

Julie went beyond the call of duty in making us feel confident and being available at any time to talk us through any question or worries we had about the process.

We will be recommending Julie as a mortgage advisor to anyone who is considering purchasing a house; from first time buyer to frequent home buyer. It has been a pleasure and Charters Financial Services should be proud to have Julie as an employee.

Andy L

December 2019

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