Help to Buy a property
The government has created a number of
Help to Buy: ISA
With Help to Buy: ISA, the Government will boost your savings by 25%. So, for every £200 you save, you will receive a government bonus of £50 (up to the maximum amount of £3,000 per
- Savings < £1,600 = You do not have sufficient savings for a bonus.
- Savings between £1,600 and £12,000 = The Government will top up your savings by 25%.
- Savings > £12,000 = The Government will top up your savings by £3,000.
Help to Buy: Equity Loan
Equity loan is a government scheme designed to help
With a Help to Buy ‘equity loan’, the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.
You won’t be charged loan fees on the 20% loan for the first five years of owning your home.
To reflect the current property prices in London, from February 2016 the Government is increasing the upper limit for the equity loan it gives new home-buyers within Greater London from 20% to 40%.
If the home in the example above sold for £210,000, you’d get £168,000 (80%, from your mortgage and the cash deposit) and you’d pay back £42,000 on the loan (20%Help to Buy ). You would need to pay off your mortgage with your share of the money.
The home you buy must:
- be a new build
- have a purchase price of up to £600,000 in England (or £300,000 in Wales)
- be the only one you own
- not be sub-let or rented out after you buy it
- be one that you can show you can’t afford (if you’re applying in Wales)
Help to Buy: Shared Ownership
Help to Buy: Shared Ownership allows you to buy a share in a newly built home or an existing one (through housing association resale programmes) and pay a reduced rent on whatever is outstanding.
Usually, you will be able to purchase between 25% and 75% of the property, with a mortgage or savings, and the landlord (usually the council or a housing association) to own the rest.
Over time, the buyer can purchase larger shares of the property from the landlord until the buyer owns it completely. At this point, the buyer will continue to pay off the mortgage but will no longer pay any rent.
You could buy a home through Help to Buy: Shared Ownership in England if:
- your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London
- you are a first-time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.