Help to Buy 1
Published 16th August 2017
Help to Buy 1 is the original help to buy scheme, launched as a way of encouraging potential home owners to buy newly built properties with a small deposit.
YOU: 5% deposit
LENDER: 75% mortgage
GOVERNMENT: 20% equity loan
It involves the borrower putting in 5% deposit, then taking an interest free equity loan from the government for 20%, and a 75% mortgage with a participating lender.
You can buy any new-build property up to £600k in value, with no fees or interest to pay on the equity loan for the first 5 years of borrowing, after which you are charged a very reasonable 1.75% in the 6th year, increasing 1% + RPI every year onwards.
As it’s an equity loan, when you sell the property you give the government back their share of any profit – so if you bought for £100k using a 20k equity loan and then sold the property for £120k a few years later, you’d need to repay 20% of the £120k = £24k.
The initial success of this scheme has now been surpassed with the launch of the new Help to buy 2 scheme in October 2013, where it as been made possible to buy ANY property in the UK on the open market, but many home movers and first time buyers continue to make use of Help to Buy 1 successfully.
To make an enquiry about Help to Buy, any of the other government schemes, or for anything else, please fill out an enquiry below or give us a call on 0800 304 7880.