With the Help to Buy Equity Loan, the government can lend you a significant percentage of your newly built home’s total value – up to 20 per cent in England and as high as 40 per cent in London.
This Help to Buy for Any Property Assistance is only available in England as other governments in the United Kingdom run their own schemes, lending up to 15 per cent in Scotland and 20 per cent in Wales.
The scheme allows buyers to secure new-build Help to Buy scheme properties with just a 5 per cent deposit and a mortgage loan-to-value ratio of up to 75 per cent. Additionally, there will be no interest charged on the 20 per cent loan within the first five years of owning your home.
Take, for instance, a home with a £300,000 price tag. The buyer’s 5 per cent deposit is £15,000, the government’s 20 per cent loan is £60,000, and your commercial lender’s 75 per cent mortgage is £225,000.
For a home in London with a £500,000 value, £25,000 is the buyer’s 5 per cent deposit, £200,000 is the government’s 40 per cent loan, and the remaining £275,000 is the 55 per cent mortgage from your commercial lender.