Help to Buy

Help to Buy

With a Help to Buy: Equity Loan, the Government lends first time homebuyers up to 20% of the cost of the property, so you’ll be able to own a beautiful Story Home with only a 5% cash deposit. Then you’d get a 75% mortgage to make up the rest.

This means you can afford more than you might think. The loan is interest-free for the first five years, however you will be charged a small £1 admin fee every month. The loan can be paid back at any point or upon the sale of your home. If you’re a first-time buyer in England, you can apply for a Help to Buy: Equity Loan.

This is a loan from the government that you put towards the cost of buying a newly built home.
You can borrow a minimum of 5% and up to a maximum of 20% of the full purchase price of a new-build home.

There are regional price caps that determine which homes can be purchased with Help to Buy. In Cumbria and the North West the maximum property value it can be used on is £224,400.


The equity loan, the deposit you have saved, and your repayment mortgage cover the total cost of buying your newly built home.

The percentage you borrow is based on the market value of your home when you buy it.
You do not pay interest on the equity loan for the first 5 years. You start to pay interest in year 6, on the equity loan amount you borrowed.

The equity loan payments are interest only, so you do not reduce the amount you owe.
You can repay all or part of your equity loan at any time. A part payment must be at least 10% of what your home is worth at the time of repayment.

Paying back the equity loan

When deciding if an equity loan is right for you, it’s important to consider the full cost of your borrowing:

For the first 5 years:

  • The equity loan is interest free
  • You pay a £1 monthly management fee by Direct Debit

After 6 years:

  • Pay the £1 monthly management fee
  • Pay monthly interest fee of 1.75% of the equity loan
  • Interest rate will rise each year in April by the Consumer Price Index (CPI), plus 2%
  • Continue to pay interest until you repay your loan in full

When you take out your equity loan, you agree to repay it in full, plus interest and management fees.

You must repay your equity loan in full:

  • At the end of the equity loan term
  • When you pay off your repayment mortgage
  • When you sell your home
  • If you do not follow the terms set out in the equity loan contract and we ask you to repay the loan in full

The amount you pay back is worked out as a percentage of the market value at the time you choose to repay.

If the market value of your home rises, so does the amount you owe on your equity loan. And if the value of your home falls, the amount you owe on your equity loan falls too.

For more information please visit the Help to Buy website.

For more information on how to repay your Help to Buy: Equity Loan please visit homebuyers’ guide.