A: Help to Buy is a Government-backed initiative designed to support buyers with small deposits to take their first or next step on the property ladder by making affordable mortgages more readily available.
A: Help to Buy is split into two options – a Mortgage Guarantee and an Equity Loan.
The Help to Buy Mortgage Guarantee benefits buyers with a deposit of between 5% and 20% looking to purchase a new or existing home.
The Government will cover your mortgage lender on a percentage of the loan amount, lowering interest rates by reducing the element of risk encountered by the lender.
The scheme is available from participating mortgage lenders only.
Available on new-build properties built by participating developers, Help to Buy’s Equity Loan gives buyers with a 5% deposit the opportunity to benefit from lower loan-to-value mortgage rates.
As a general rule, the higher the percentage of the purchase price you require from your lender, the higher the rates of interest offered will be.
The scheme will loan the borrower 20% of the purchase price, meaning that once combined with the 5% deposit, they are able to take advantage of 75% loan-to-value mortgage rates.
You will not be charged on the equity loan for the first five years you are living in the property. In the sixth year, you will be charged a fee of 1.75% of the loan’s value, increasing each year by the Retail Price Index plus 1%.
A: You will have to pay back the equity loan when you sell your home or at the end of your mortgage period – whichever comes first.
A: In order to qualify to take advantage of Help to Buy, you must be able to meet the following criteria, in addition to standard mortgage checks:
A: To find a participating lender with the deal that is right for you, book a FREE mortgage consultation with our expert Financial Advisors by completing the online form, or by calling 0161 443 4555.
“Your home may be repossessed if you do not keep up repayments on your mortgage.”