{"id":4272,"date":"2019-10-28T17:51:14","date_gmt":"2019-10-28T17:51:14","guid":{"rendered":"https:\/\/www.credit-score.com\/blog\/?p=4272"},"modified":"2023-06-02T14:02:50","modified_gmt":"2023-06-02T14:02:50","slug":"help-to-buy-equity-loans","status":"publish","type":"post","link":"https:\/\/www.check.co.uk\/blog\/help-to-buy\/help-to-buy-equity-loans\/","title":{"rendered":"Everything you need to know about Help to Buy Equity Loans"},"content":{"rendered":"\n

Help to Buy Equity loans are loans which are put towards the cost of buying a home alongside a mortgage and your deposit which allow you to start with only a 5% deposit, allowing prospective buyers to get a foot on the property ladder. <\/p>\n\n\n\n

As you take out a smaller mortgage, better mortgage rates\nare available to you. The loan is not repayable until you either sell the house\nor 25 years pass, whichever comes first. It\u2019s worth noting that the loan amount\nis based on the value of the property, so if an independent valuation values\nthe property much higher on sale, or at repayment, you\u2019ll be expected to pay\n20% (or 40%) of the value. The amount actually lent to you is not significant. <\/p>\n\n\n\n

Equity loans are an affordable homeownership scheme ran by the government where they will give you a loan for up to 40% of the value of a property that you are buying (20% outside of London).<\/p>\n\n\n\n

You only need a 5% deposit (of the full purchase price of\nthe property), then you take the rest (75% or 55% in London) as a mortgage. <\/p>\n\n\n\n

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Inside London<\/figcaption><\/figure>\n\n\n\n
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Outside London<\/figcaption><\/figure>\n\n\n\n

For example, with a house costing \u00a3200,000 outside of\nLondon, it would be broken down like this:<\/p>\n\n\n\n

5% deposit \u2013 \u00a310,000<\/p>\n\n\n\n

20% Equity loan – \u00a340,000 <\/p>\n\n\n\n

75% Mortgage \u2013 \u00a3150,000<\/p>\n\n\n\n

If you had a house costing \u00a3200,000 inside London, you could\ndo this:<\/p>\n\n\n\n

5% deposit \u2013 \u00a310,000<\/p>\n\n\n\n

40% Equity loan – \u00a380,000 <\/p>\n\n\n\n

55% Mortgage \u2013 \u00a3110,000<\/p>\n\n\n\n

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What's Included?<\/p>\n<\/span><\/div>\n