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Help to Buy

Help to Buy: Equity Loan (2021-2023)

Help to Buy London is a government scheme designed to help first time buyers who have never owned a property/land before to advance up the property ladder in London.

The property you buy must:

be a new build
have a purchase price of up to £600,000, subject to regional price caps
be the only one you own
not be sub-let or rented out after you buy it

How does it work?

Help to Buy is an equity loan from the government up to 40% of the value of a property, provided you have a deposit of 5% you will only need a mortgage of 55% of your new home.

What properties can I buy with Help to Buy London?

New build properties within the 32 boroughs of London up to the value of £600,000 are eligible for the Help to Buy London scheme.

When getting a mortgage you will be able to borrow up to a maximum of 4.5 times your salary.

Detailed information can be found on the Government website www.helptobuy.gov.uk

Help to Buy London equity loan example

For a property worth £400,000	Amount	Percentage
Cash deposit	£20,000	5%
Equity loan	£160,000	40%
Your mortgage	£220,000	55%

How do I pay back the Help to Buy London equity loan?

You must pay back the loan after 25 years or when you sell your home - whichever comes first.

You will not be charged any interest on the 40% loan for the first five years of owning your home.

However a management fee of £1 a month will be applicable from the date of purchase for the duration of the equity loan.

From year six, a fee of 1.75% is payable on the equity loan, which rises annually by CPI (Consumer Price Index) inflation plus 2%.

For full information about the scheme, please visit helptobuy.gov.uk

Looking for a mortgage

Get expert mortgage advice

If you think you could benefit from a Help to Buy mortgage, Lauristons can introduce you to out partners, Embrace Financial Services.

Embrace Financial Services are experts in mortgages and financial planning. They will be able to discuss Help to Buy with you to see if you are eligible and if this is the best option for you.

Find out more

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Embrace Financial Services usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.