When buying through the Help to Buy Equity Loan Scheme, you’re required put down a 5% deposit on a registedred new build. The government will then lend you an additional 20%, which is interest-free for 5 years (1.75% annual interest thereafter).This assistance leaves you with a 25% mortgage in total, meaning you need only apply for a 75% mortgage.
Because your mortgage will be a 75% mortgage, your monthly mortgage payments will be significantly less than if you put only a 5% or 10% deposit down on a mortgage of the same value. The government loan can be paid back at any stage but must be paid back in full within 25 years. If your property increases in value during this period, you will have to pay a percentage of the growth on top of the initial 20% amount.
The conditions for Help to Buy are that the home you are looking to purchase must be from a registered builder or construction firm, with the home valued at £600,000 or less. It must also be your only home. There are no maximum salary thresholds for the Help to Buy scheme.