There are many ‘Help to Buy’ schemes available in the UK to help first time buyers afford to buy a house. Here are just a couple of the different schemes explained;
Help to Buy: Mortgage Guarantee
This is also known as an equity loan. By adding an equity loan to the deposit you can provide, you’ll be able to apply for a smaller mortgage and choose from a wider range of mortgage deals.
You can apply through the Help to Buy Equity Loan Scheme if;
- You’re buying a new build property that you will be living is as your main home
- You can only own this property
- You can provide at least 5% of the property’s value
For the first five years there are no borrowing fees or interest on the equity loan. However you can start repaying the loan whenever you want. After 5 years there will be an interest charge of 1.75% of the amount of your loan at the time you took it out, which will rise each year after that by the increase in the Retail Price Index.
Help to Buy ISA
You could boost your savings by 25% by having a help to buy ISA. For every £200 you save, receive a government bonus of £50. The maximum bonus you can receive is £3,000.
1) Open an account
2) Deposit up to £1,200
3) Save £200 a month
4) Receive bonus
You will need to of saved a minimum of £1,600 in your Help to Buy ISA before you can claim the minimum of £400 bonus. If yourself and a partner for example are saving for a house together then you are both eligible to take out two separate ISAs and therefore receive £6000 bonus between you from the government.