Help to Buy scheme

The Help to Buy scheme was an equity loan provided by the Government. You were lent up to 40 per cent of the cost of your new build home, so you that you would need a minimum 5 per cent deposit and a 55 per cent mortgage to make up the rest. (For this scheme, you must have had a mortgage, which would be a first charge, as the equity loan can only be a second charge.) 



The equity loan period runs either until the property is sold or the mortgage is redeemed, whichever term is the shortest, up to a maximum of 25 years.

For the first five years you own your home, you will not be charged any interest on the 40 per cent loan. However, a management fee of £1 a month will apply from the date of purchase.

From year six, a fee of 1.75 per cent is payable on the equity loan, which rises annually by RPI inflation (Retail Price Index) plus 1 per cent.

• equity loans were available to first time buyers as well as homeowners looking to move. You could not have a deposit lower than 5 per cent of the full purchase price
• the maximum income multiple for a Help to Buy purchase (full price of the property) was 4.5 times your household joint or single income
• the mortgage taken must be on a repayment basis and cannot be interest-free. Help to Buy London used the calculator provided by the Homes and Communities Agency to carry out a sustainability check when you submitted your application
• you cannot part exchange your current home to buy a new home under Help to Buy. You must not own any other property at the time you buy your new home with a Help to Buy equity loan
• the home you want to buy must be a new build, advertised as Help to Buy by a Help to Buy registered developer, with a maximum price of £600,000
• help to Buy assistance was unavailable for new builds that are not Help to Buy registered
• you would not be able to sublet a home purchased under Help to Buy.