birmingham city.jpeg

The Help to Buy scheme offers an equity loan where the government lends first-time buyers in England money to buy a newly-built home.

Help to Buy equity loan

How does Help to Buy work?

You can get a low-interest loan towards your deposit. This is called an equity loan.


The home you buy must:

  • be a new build from a developer who is part of the HTB scheme.

  • the maximum purchase price of the house depends on where you are buying your house.

    • North East £186,100

    • North West £224,400

    • Yorkshire and the Humber £228,100

    • East Midlands £261,900

    • West Midlands £255,600

    • East of England £407,400

    • London £600,000

    • South East £437,600

    • South West £349,000

  • be the only one you own

  • not be sub-let or rented out after you buy it

  • be one that you can show you cannot afford (if you’re applying in Wales).

How it works

With an equity loan:

  • you need a minimum of 5% deposit

  • the government will lend you up to 20% of the purchase price (up to 40% in London)

  • you need a mortgage of up to 75% for the rest (up to 55% in London)

You must buy your home from a registered Help to Buy builder, we can provide you with a list.

Equity loan fees

You will not have to pay any interest on the equity loan for the first five years.

In the sixth year, you'll be charged monthly interest of 1.75% pa of the equity loans value. The fee then increases every year, according to the Retail Prices Index plus 1%. Your Help to Buy agent will contact you to set up these monthly fee payments. You’ll also get a statement about your loan each year.

You will only repay interest and the value of the equity loan will not reduce. You will have opportunities to repay the equity loan, please discuss this with your adviser.

Paying back the loan

You must pay back the loan after 25 years or when you sell your home - whichever comes first. The amount you pay back depends on how much your home is worth (the market value).

For example: If you purchase a property for £200,000 and you apply for the maximum 20%, your initial equity loan will be £40,000. If you then sell the property in the future for £300,000 you would pay back 20% of the future value so £60,000. The future purchase price will be determined by a RCIS qualified surveyor.

You can pay back part or all of your loan at any time. The smallest repayment you can make is 10% of the market value of your home.