With the Help to Buy schemes, there are various different ways to enable you to get on the property ladder, or move to another property.
There are the schemes below in place to help you to purchase a property:
London Help to Buy
Help to Buy: ISA
Are you looking to buy a property in London?
Then London Help to Buy is the scheme for you.
Since 1 February 2016, the Help to Buy London scheme’s upper limit was raised from 20% to 40%, meaning you can get a government equity loan for up to 40% of the purchase price of the newly-built property, when you put down a deposit of at least 5%.
For example, for a property that costs £500,000, you would provide a 5% deposit of £25,000, and receive a government loan of 40% (£200,000) meaning you would need a 55% mortgage for the value of £275,000.
When you come to move from the property and sell, you would receive 60% (mortgage plus deposit) and would then need to pay back the loan. However, you won’t be charged loan fees on the 40% loan for the first five years of owning the home.
What is the Help to Buy: Equity Loan scheme?
This scheme works in the same way as the London Help to Buy scheme, except the government loan is capped at 20% of the cost of a newly-built home, meaning you require only a 5% deposit.
For example, for a property that costs £200,000, you would provide a 5% deposit of £10,000 and receive a government loan of £40,000 (20%). You would then need to get a 75% loan-to-value mortgage for the remaining £150,000.
Just like the London Help to Buy scheme, you won’t be charged loan fees on the 20% loan for the first five years of owning the home.
The same conditions as the London Help to Buy scheme apply when you come to sell the property.
What if I can’t afford 100% of a property?
If you can’t afford to mortgage 100% of a home, you can buy a home through the Help to Buy: Shared Ownership scheme if your household earns less than £80,000 or less a year outside of London, or £90,000 or less within London.
You can also use the Shared Ownership scheme if you’re a first-time buyer, an existing shared owner looking to move home, or you used to own a home but an’t afford to buy one now.
I’m a first-time buyer
Saving to buy your first home? The Help to Buy: ISA is for you.
By saving your money into an a government Help to But ISA, you receive a government bonus of £50 for every £200 you save, up to a maximum bonus of £3,000.
You can save £200 a month, with a maximum lump sum of £1,200 allowed within your first month, and you’ll receive a government bonus between the minimum of £400 (requiring £1,600 to be saved) and a maximum of £3,000 (requiring £12,000 to be saved.)
To find out if you’re eligible for any of the Help to Buy schemes, get in touch with one of our advisers directly who can walk you through the process step-by-step.