The equity loan scheme is a five year interest free government loan. All you need is a 5% deposit to apply. This initiative is available to apply for until March 2023 – note that it’s only available to first time buyers on new build properties.
The government provides a 20% equity loan of the value of the property, which added to your 5% deposit means that you will have a 25% deposit towards your purchase. Note that if you’re buying a property in London then it’s upto 40% of the value.
You won’t pay interest on the 20% for the first five years of the loan, after this time you will be charged at a rate of 1.75% This is broken down into monthly payments over the year, example below:
Purchased for £200,000 20% Equity loan – £40,000 1.75% of the equity loan – £700 Monthly payments of £58.33
Remember that the loan is based on the value of your home, so as your equity increases, so does the amount you owe and eventually have to pay back.
There are regional price caps which apply to the purchase price of your home – in Yorkshire it’s £228,100.
You’ll need to find a mortgage for the remaining 75% – our helpful Wakefield based Mortgage Advisers can assist you with the whole buying process and find you the best deals available.
Enquire today – there is no obligation to go ahead and your credit score will not be impacted.
The scheme is intended to assist people purchasing their main residence and the equity loan will need to be repaid before the property is let.
No, you can take anything up to this amount. On the other hand, you can also use a lower deposit – for example, if you have 10% saved up and only wants to use 5%, you can borrow the full 20%
The equity loan is repaid when you sell the property, another option is to remortgage your home in 5 years time and repay it by raising the money from your equity. Contact one of our help to buy experts for more information about this process.
Using simple figures, if your purchased your property for £200,000 you would have a loan of £40,000. If in 5 years time you wanted to repay this loan and your property was valued at £300,000, you would then owe £60,000.
Yes – there are many options available if you have a less than perfect credit history. Speak to one of our Wakefield based advisors today.
Unfortunately this scheme is not available to people who have owned a property before.
You can apply via the government website – the application may seem daunting but one of our friendly Wakefield based mortgage brokers are on hand to assist you with the application.
Regional Purchase Price Restrictions – Full List
| Region | Maximum property purchase 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 |
We believe in guiding you throughout the entire mortgage journey, dealing with estate agents and solicitors is part of what we do.
Wakefield Mortgage Services is a trading style of TMG Direct which is a directly authorised by the Financial Conduct Authority. Firm Ref Number 786245. In general, buy to Let mortgages are not regulated by the Financial Conduct Authority.
A mortgage fee payable is dependent on the complexity of the case and will be agreed at the outset. A fee of up to 1% of the loan amount is payable, for example on a £100,000 mortgage a 1% fee would equate to £1,000. A typical fee is £399 and is payable at the outset or on the issue of an offer of the mortgage.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
