Help to Buy is a government scheme designed to help people buy a home with a deposit as low as 5%.

You can use Help to Buy: Equity Loan to move home and get your foot on the property ladder.

Equity loan

Equity loans are open to both first-time buyers and people moving house. The equity loan only covers new-build homes in England with a purchase price up to £600,000.

You won't be able to sub-let your home if you use this scheme. It must also be your only property.

With an equity loan you'll need to contribute at least 5% of the property price as a deposit. The government will then give you a loan for up to 20% of the price if you’re buying outside of London. In London this increases to up to 40%. Finally, you'll need a mortgage of up to 75% to cover the rest.

You won't be charged interest fees for the first 5 years of owning your home. In the sixth year, you'll be charged a fee of 1.75% of the loan's value. After this, the fee will increase every year. The increase is worked out by using the Retail Prices Index plus 1%. You'll also need to pay a £1 per month fee for the lifetime of the loan.

Your Help to Buy agent will contact you before the fees start, to set up monthly payments with your bank. You'll also be sent a statement about your loan each year. Fees don't count towards paying back the equity loan.

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