Help to Buy: Equity Loan

What is Help to Buy: Equity Loan?

Help to Buy: Equity Loan is a loan from the government that you put towards the cost of buying a newly built home in England. Separate schemes are available in Wales and Scotland.

You must buy your home from a homebuilder registered for Help to Buy: Equity Loan.

You can borrow a minimum of 5% and up to a maximum of 20% (40% in London) of the price of a new-build home.

The amount you pay for a home depends on where in England you buy it.

Help to Buy: Equity Loan price caps - April 2021 to March 2023
Region Maximum property price
North East  £186,100
North West  £224,400
Yorkshire and the Humber  £228,100 
East Midlands  £261,900 
West Midlands  £255,600 
East of England  £407,400 
London  £600,000 
South East  £437,600 
South West  £349,000 

The maximum property price is the full purchase price. You cannot change or negotiate this price.

Your homebuilder will be able to confirm if the home you want to buy is within the price range.

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

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.

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 comply with the terms set out in the equity loan contract and we ask you to repay the loan in full.

When you take out an equity loan, you do not pay interest for the first 5 years. When you start to pay interest in year 6, it is on the amount you borrowed.

The monthly interest payments you make do not pay off your equity loan. You do not pay monthly equity loan repayments to reduce the amount of equity loan you have borrowed.

An equity loan is secured against your home by a legal charge in the same way a repayment mortgage is.

Help to Buy: Equity Loan is exempt from regulation by the Financial Conduct Authority.

You may pay back more than you borrow

The percentage you borrow is based on the market value of your new home when you buy it.

When you repay your loan in full or in part, 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.

Your home may be repossessed if you do not keep up repayments on your repayment mortgage, equity loan or other loans secured against it. Consider seeking independent financial advice before making any financial decisions.


Who can apply for a Help to Buy: Equity Loan?

You will need to meet the eligibility criteria to get a Help to Buy: Equity Loan.

More information

If you would like more information about the home buying process with Help to Buy: Equity Loan, please access a copy of the homebuyers' guide to Help to Buy: Equity Loan (2021-2023)

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