Help to buy mortgage schemes
Published 16th August 2017
Help to Buy explained
The government launched the initial scheme (Help to Buy 1) last year, to assist borrowers in purchasing new build properties with just 5% deposit and a free 20% equity loan from the government, in an attempt to get the market moving and potential first time buyers out of rented accommodation and onto the property ladder.
NewBuy was launched in March 2012 which was a similar scheme to encourage people to buy newly built property, but without the equity loan – simply put, the government would back a 95% mortgage up to 15% to give the lender more security without having to accommodate the 20% interest free loan.
The success of the schemes has lead to the launch of Help to Buy 2, the same concept as NewBuy but for house-hunters to buy ANY home in the UK under £600k that isn’t a new build. It was initially scheduled to launch in Jan 2014 but was brought forward to October ’13 to get a running start, and now seems to have kicked the industry back into life with record levels of mortgage approvals.
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