WHAT IS THE HELP TO BUY SCHEME AND MORTGAGE GUARANTEE?

HELP TO BUY

Help to Buy is a government-backed initiative to help people buy a home. It’s open to homebuyers (both first-time buyers and home movers) in England who can provide a 5% deposit and is available on homes valued up to £600,000.

A variety of small, medium and large housebuilders are expected to offer their new homes under the Help to Buy scheme.

There are two options to choose from – equity share or a mortgage guarantee.

Equity share

Available from April 2013, the shared equity option expands the existing FirstBuy scheme and can help buyers who want to reduce their monthly mortgage payments by supplementing their 5% deposit with a loan of 20% of the value of the property, interest-free for five years. The loan is repayable at any time, or when the property is sold.

This part of the scheme is only available on new-build homes with participating housebuilders.

Mortgage guarantee

Available from January 2014, the mortgage guarantee option is open to those who can afford the repayments on a 95% home loan. A government guarantee encourages lenders to offer buyers with a low deposit access to affordable mortgages. Buyers still need to meet lenders’ affordability criteria. This part of the scheme is available on new-build and re-sale homes.

MAXIMUM £30,000 deposit

  • UPTO 20% loan from government – interest free for the first five years
  • Available to first time buyers and home movers
  • Available from as little as 5% deposit
  • Purchase price must below £600,000
  • Excludes Scotland and Wales
  • Mortgage guarantee available January 2014

 

Link to Help to buy calculator http://www.rightmove.co.uk/help-to-buy.html

 

 

HelptoBuyinfographic