Launched in 2013 the Help to Buy mortgage scheme was meant to “help anyone who works hard and aspires to own their own home has that opportunity” So said the then economic secretary to the Treasury, Stephen Barclay.
With the Help to Buy equity loan the government will lend you up to twenty per cent of the cost of a new build home. Your need to have saved a five per cent deposit. A mortgage of seventy five per cent then makes up the rest. To reflect higher London property prices the government will lend up to forty per cent.
For the first five years you will not be charged any interest on the Help to Buy loan. From the sixth year the rate will be 1.75 per cent. After that the fee will increase every year in line with the Retail Price Index (RPI) plus one per cent. The catch being that if you do not repay the equity loan while you are living in the property, the government will reclaim its stake back when you sell. So if you still owe twenty per cent of the loan the government will reclaim twenty per cent of the sale price of the property.
This scheme was brought in to help you save for your first home. The government pays a bonus of 25 per cent. So for every £100 you save the government pays you a bonus of £25. The bonuses are capped at £3,000 with the minimum being £400. Most banks and building societies offer these savings accounts.
What about the Help to Buy shared ownership?
This scheme gives you the chose to buy a stake in the property of between twenty five and seventy five percent. You then pay rent on the difference to a housing association. It is only available to households earning up to £80,000 or £90,000 if you live in London.
Since its launch in April 2013 to April 2017 over 120,000 properties were bought with Help to Buy equity loans. The government has handed out £5 billion through equity loans, helping people buy over £28.5 billion worth of property. Over 62,000 people have taken out a Help to Buy ISA. Most of the loans were made outside of London.
All our mortgage advisers are register to offer the Help to Buy mortgages. Our mortgage advisers will undertake a full review of you circumstances and gain an understanding of what you are looking to achieve. We will then make our recommendation. We are independent financial advisers, so we looking at all the options available to you and offer unbiased advice.
We have offices in Kettering, Stamford and London. Our mortgage advisers also operate in Corby, Wellingborough Raunds, Northampton and Towcester. We make use of meeting rooms in Northamptonshire, Lincolnshire, Bedfordshire and Warwickshire. Click here to contact us today.