HELP TO BUY
ONLY 5% DEPOSIT!
The Government has created the Help to Buy scheme to help hard-working people like you take steps to buy your own home. Whether you want to get onto the housing ladder or move up it, Help to Buy makes it possible to buy a new-build or existing home priced up to £600,000 with as little as a 5% deposit. The scheme was due to end in April 2021, but its availability has been extended until 2023. However, within that two-year extended period it will only be available to first-time buyers.
With a Help to Buy: Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
You won’t be charged loan fees on the 20% loan for the first five years of owning your home.
Example: for a home with a £200,000 price tag
If the home in the example above sold for £210,000, you’d get £168,000 (80%, from your mortgage and the cash deposit) and you’d pay back £42,000 on the loan (20%). You’d need to pay off your mortgage with your share of the money.
A mortgage supported by the Help to Buy: mortgage guarantee scheme works in exactly the same way as any other mortgage except that under the scheme the Government offers lenders the option to purchase a guarantee on mortgage loans.
Because of this support, lenders taking part are able to offer home buyers more high loan-to-value mortgages (80-95%)
You will still be fully responsible for your mortgage repayments. So if you have a 5% deposit, you will need to take out and pay back a 95% mortgage.
EXAMPLE: For a home with a £200,000 price tag