Help to Buy a House within the "Help to Buy" scheme
Our Conveyancers are very used to dealing with the intricacies of Government schemes to provide help to buy a house. The latest Government scheme offering help to buy a home is the ‘Help to Buy’ scheme whereby the Government will provide equity loans of 20% of the value of the Property. The 20% Government Equity Loan will provide anyone wanting to buy a newly built house to with help to buy a house with just a 5% deposit. Coupled with the buyer’s 5% deposit, and the scheme’s 20% equity loan it will enable house buyers to finance their purchase with a 75% mortgage providing them with help to buy a house which is bigger than they would otherwise be able to afford. They will also be able to obtain a better interest rate on their mortgage and lower monthly payments compared with if they had to get a 95% mortgage with just their 5% deposit.
Unlike previous schemes which were available to first time buyers only, Help to Buy provides all buyers of new build homes up to a value of £600,000.00 with help to buy a house. The Help to Buy equity loans are interest free and repayable only on the sale of the Property or at the end of the principle mortgage on the property (whichever is the earlier event).
Loan fees will be charged on the Help to Buy loans from the 6thyear at an initial rate of 1.75% of the loans value to increase annually by RPI plus 1%. The borrower will be able to repay 10%, 20% or the total amount without selling the property.
Worked example based on a £120,000 purchase price
Buyer’s main mortgage (76%) £91,200
Deposit (4%) £4,800
Government equity loan (20%) £24,000
Total Purchase Price: £120,000