First Time Buyer? Help to Buy could get you moving with just a 5% deposit.
If you’re a first-time buyer, we have some great news. Help to Buy means your dream home is closer than you think. But what is it?
It is designed to help first-time buyers purchase a newly-built home. Under this scheme, all you need is a 5% deposit and you can borrow 20% of the purchase price interest-free for the first five years*. If you live in London, you can borrow up to 40% of the purchase price, which goes a long way towards the final cost. Visit our Help to Buy blog to learn more about the scheme.
The Help-to-Buy Equity Loan gives First Time Buyers a lift on to the property ladder by making the purchase more affordable. Under this scheme the Government will lend you 20% of the purchase price interest-free for the first five years. You then only need a 5% cash deposit and a 75% loan-to-value mortgage to make up the rest. With a larger deposit, you then have access to more attractive mortgage rates than on a higher loan-to-value mortgage of 80-90%.
The Help-to-Buy Equity Loan can benefit existing homeowners too. With only a 5% deposit you could get a boost up the property ladder, moving to a bigger home once believed to be beyond your budget. The Equity Loan scheme works for homeowners exactly the same as it does for First Time Buyers, with a Government-backed 20% equity loan to top up your 5% deposit and a 75% mortgage loan from a lender. The example for a typical 3 bedroom highlights how the Government's loan can take nearly £100,000 off your initial mortgage to help you secure your family home sooner than you think.
If you're looking to move to London, the London Help-to-Buy Equity Loan scheme helps First Time Buyers with a 40% Government loan due to higher house prices. Under this scheme, the Government will lend you 40% of the purchase price interest-free for the first five years. You still only need a 5% cash deposit and then a 55% loan-to-value mortgage to make up the rest.
If you can't afford a 100% mortgage on your own then shared ownership allows you to buy a share of your home (between 25-75% of the property value) and then pay rent on the remaining share. You can then choose to buy more shares later on to increase your ownership when you can afford to.
