Help To Buy Mortgages with Reputable Mortgage Brokers You Can Trust
When you’ve found a house you love, you should always follow your heart.
As a first-time buyer, saving up a deposit for a house isn’t always easy. Finding your dream home and having to settle for something less can be disheartening. At Avail Mortgage Brokers, we believe that you should never settle for anything less than butterflies, so if you’ve found a new build house you’ve fallen in love with, then our mortgage advisers are here to provide you with the help you need. Our expert mortgage brokers are here to source mortgage deals that work for you. We are committed to navigating our clients on the right path in searching for the most suitable option for them. With over 35 years of experience, we understand how important it is to make the right decision based on your circumstances. Consequently, Avail Mortgage Brokers are here to assist you.
So long as you can afford a 5% minimum deposit, you may be eligible for a government loan mortgage scheme – Help To Buy: Equity Loan*, which can pay as much as 40% toward the property value. The remaining value can be made up through a Help To Buy mortgage, which we can help source, provide and instruct for you – to help secure that new build home.
From our range of specialist repayment mortgages through to mortgage interest rates which include fixed interest rates and variable interest rates, we’ll select the most suitable mortgage options based on your financial situation and ensure you’re aware of the repayment basis details too. Guiding you through the Help To Buy scheme, we’ll ensure that your personalised client portal provides you with key access to your mortgage, mortgage documents and contact details of your own mortgage adviser, who is there to help you through the process. No mortgage questions are ever daft. No issue is ever too small. We’re always happy to help you, to ensure you get the most out of your mortgage.
To learn more about our Help To Buy mortgage quotes – as well as our advanced mortgage calculator – please do not hesitate to get in touch with us today. We provide help for clients in areas such as Leeds, Huddersfield, Bradford, York and Harrogate, so we know that we can help you too.
What Is a Help To Buy: Equity Loan & How Does It Work?
The Help to Buy: Equity Scheme provides customers with an equity loan where the government lends first-time buyers to secure a new-build property. There is a maximum property price that the affordable home ownerships scheme will provide funding for, however, this limit varies in accordance with the different regions in England:
|East of England||£407,400|
|Yorkshire and the Humber||£228,100|
For residents in Scotland and Wales, there are alternative schemes available to assist with buying a home. Under the Equity scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit.* If you live in London, you can borrow up to 40% of the purchase price. However, you can determine your Equity loan percentage using a variety of online calculators. To make up the remaining 75% (or 55% in London), you can take out a repayment mortgage.
What Is A Repayment Mortgage?
With a repayment mortgage, you’ll be making monthly repayments for an agreed period of time (known as the term) until you’ve paid back both the capital (money borrowed) and the interest (the charge made by the mortgage lender on the amount you owe).
This means that your mortgage balance will get smaller every month and, as long as you keep up the mortgage repayments, your mortgage will be repaid at the end of the term (usually 25 years).
You’ll also need to decide on the type of repayment mortgage that you want – whether that’s a fixed interest rate or a variable interest rate.
Fixed Interest Rate Mortgage: A fixed-rate mortgage is a mortgage loan where your interest rate is guaranteed to stay the same for a set period of time (typically 2 – 5 years).
Variable Rate Mortgage: A variable rate mortgage is a mortgage loan where the interest rate – and therefore your monthly mortgage repayment – can fluctuate throughout the mortgage term. There are various types of variable interest mortgages, such as; A standard variable rate is where the lender increases or decreases the interest rate; A tracker rate typically follows the movements of another interest rate, usually the Bank of England’s base rate.
Here at Avail Mortgages, we can help you find the right mortgage quotes to aid your Help To Buy: Equity Loan application and make your new build house a home as soon as possible. Therefore, if you’re looking for a repayment mortgage from a reputable mortgage company, then here at Avail Mortgages, we can help and recommend that you get in touch. At Avail Mortgages, we help clients in Leeds and the surrounding areas including Huddersfield, Bradford, York and Harrogate secure their new build home with the most suitable mortgage deal, and provide support through the Help To Buy scheme too.
What Is The Interest Rate With Help To Buy: Equity Loans?
When it comes to the government’s equity loan scheme, you don’t pay any interest or product fees for the first five years. However, in the sixth year, you’ll be charged 1.75%. After this point, the fee increases based on the Retail Prices Index (RPI) plus 1% each year. It’s important to note that these fees don’t go toward paying off the government loan. It’s when you sell your home (or the mortgage is paid off), that you must repay the equity loan plus a share of any increase in the house’s value.
An Example Of The Help You Can Benefit From Depending On Your Home's Value
Your New Build Home’s Current Value = £300,000
Your Total Deposit (5%) = £15,000
Equity Loan (20%) = £60,000
Mortgage (75%) = £225,000
The house then sells for £375,000.
Increase In Value = 25%
Equity Loan Repayment = £75,000 (£60,000 + 25% profit)
Mortgage = £225,000
Your Share = At least £75,000
The remaining £75,000 (or more) can be used as a deposit for your next home.
Eligibility Criteria: Who Qualifies For The Scheme?
- You must be aged 18+.
- The property you wish to purchase must be a new-build home.
- You must be in a position to be able to afford fees and interest payments
- The new-build home must be sold by a Help to Buy registered home builder
- You must not own or live in any other home in the UK or abroad
- The home must not exceed the maximum property purchase price (the maximum limit is determined by the region)
Moreover, you must take out a mortgage which will need to be for 25% or more of the full purchase price. You’ll also need to prove to mortgage lenders that you can afford the mortgage repayments and related fees on the new build home you’d like to purchase. Here at Avail Mortgages, we can use our mortgage affordability calculator to determine this and provide advice and support throughout the process.
To apply for the equity loan itself, you must contact the Help To Buy agent in your local area, and we can help you with this. You must buy your new build home from a registered Help To Buy builder, and your local Help To Buy agent should have a list of registered builders for you to choose from. Then you can go and visit the site, choose your fittings and furnishings and await your moving-in day.
Help To Buy FAQs
Is Help To Buy Only For New Builds?
The ‘Help to Buy’ scheme was introduced to help first-time buyers and home movers to purchase a new build property with a lower deposit.
However, recently the government has introduced a Mortgage Guarantee scheme*, an update on the Help to Buy scheme where you can still put your minimum 5% deposit towards a newly built home or you can buy a pre-owned home, as long as the property value is under £600,000. If you’ve found a house you love, have a good credit history and can afford a minimum 5% deposit, then you are eligible to apply for the scheme.
After you supply the deposit, you can purchase the property through a Mortgage Guarantee, offering you a standard mortgage of 95% or a government-backed Equity Loan of 20% of the purchase price, plus a traditional mortgage. The latter option is still only available on new build properties.
Is Help To Buy Only For First-Time Buyers?
Originally the help to buy scheme was targeted at first-time buyers to help them get on the property ladder. Now, with the addition of the Mortgage Guarantee, the Help to Buy scheme is open to both first-time buyers and homeowners looking to move up in the property ladder.
This affordable home ownership scheme allows you to buy a property with the requirement that you do not rent it out. The property must be your main residence – the scheme can’t be used to buy a second home or a buy to let property.
We understand that mortgages can be complicated. Our mortgage advisers and mortgage brokers will ensure that you’re fully aware of the scheme’s criteria, the government loan repayment process and mortgage rates, as well as help you put a plan in place for mortgage repayments. We will be on hand throughout the whole process. To speak to one of our friendly experts, get in touch with us today
How To Pay Off Your Help To Buy Property?
One of the biggest draws of the equity loan scheme is that equity loans are interest-free for the first
five years*. Then, after five years, you’ll start paying interest on your equity loan until you eventually pay it back. In your 6th year of having the loan, the interest rate will be around 1.75% – this will then increase every year. You will only ever pay interest on the original loan amount.
An important thing to remember though is that property prices can change. When you take out a Help to Buy: Equity Loan, the Government owns a stake in your property. If your equity loan is worth 20% of the value of your property, the Government owns a 20% share of your home until you repay the loan. That percentage will remain the same regardless of the property value. However, if the property value rises or falls then the value of the Government’s share will rise or fall with it, meaning the amount you have to pay back may change.
In terms of when you repay your loan, it’s quite simple. You don’t have to repay the equity loan itself until you either come to sell your property or at the end of your main mortgage term – whichever of these comes first. However, like any loan, you don’t have to wait, you can pay back the equity loan at any point you want.
How Much Can I Borrow With Help To Buy?
The Help to Buy: Equity Scheme provides customers with a loan from the government for first-time buyers to secure a new-build property. There is a maximum property price that the affordable home ownership scheme will provide funding for, which varies depending on the region in which you are buying. You can apply on your own or with other people. All applicants must meet the eligibility criteria*. You must be:
- 18 or over
- A first-time buyer
- Able to afford the fees and interest payments
- Have never owned a home or residential land in the UK or abroad
- Have never had any form of Sharia mortgage finance
You can borrow 20% of the purchase price or up to 40% in London, which will remain interest-free for five years. You can apply to the scheme until 31 March 2023. After 5 years, there will be an interest fee 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*. Your mortgage advisor can explain this in more detail.
Can You Use Help To Buy Twice?
Most people think you can only use the help to buy scheme once; however, you can actually apply to use it again. As long as your previous Help to Buy: Equity Loan has been settled, you are permitted to apply to use the scheme again to fund a subsequent purchase. Although the Equity Loan scheme is only available to first-time buyers, the mortgage guarantee scheme can be used by home movers who have already owned property, meaning you can make another application if you are considering moving home. This is how the government-backed scheme stands at the moment, so if this is something you are interested in finding more information about, do not hesitate to get in touch with one of our expert mortgage advisors who can talk you through your eligibility and help you work out how much you can borrow with the Help to Buy scheme. Speak to one of our friendly experts today, and we will help you to find a suitable solution and that your mortgage process is a smooth one.
Looking For A Help to Buy Mortgage? Get In Touch Today!
What is Help To Buy? How Does Help To Buy Work? How does a repayment mortgage help, and what mortgage interest rate is right for me? How do I navigate the mortgage application? At Avail Mortgages, we can answer all of these questions and more, and provide you mortgage advice that helps make your new build house a home as soon as possible. At Avail Mortgages, we help clients in Leeds and the surrounding areas including Sheffield, Huddersfield, Bradford, York and Harrogate, and provide invaluable advice that goes beyond our mortgage services. We’ll ensure you find a suitable solution for you, and that the mortgage process is a smooth one.