Help To Buy Equity Loan - How Does It Work?

Whether you are a first-time buyer or someone looking to move house, this loan is designed to help. The Help To Buy Equity Loan is a government-funded, low-interest loan.


  • You save up 5% of the property value for the deposit

  • The government lends you 20% of the property value (40% for properties within London)

  • You only need to apply for a 75% mortgage (55% for properties in London)

The Help To Buy Equity Loan is interest-free for the first five years and interest is charged on the sixth year.



  • The equity loan is interest-free

  • £1 per month as a management fee is paid via Direct Debit


  • Interest is charged monthly at a rate of 1.75%

  • The interest rate rises each year in line with the Retail Price Index (RPI) plus an additional 1%

  • £1 monthly management fee is still to be paid

To purchase a property for £220,000 using the Help To Buy Equity Loan:

  • 5% deposit - £11,000

  • 20% equity loan - £44,000

  • Mortgage amount - £165,000


  • Must be a new build property

  • The property value must not exceed £600,000 in England (£300,000 in Wales)

  • Must be the only property that you own

  • You cannot sub-let or rent out the property once you own it

Repaying The Loan

The Help To Buy Equity Loan must be repaid in full after 25 years or when you come to sell your property. The amount that is repaid is dependent on the current property value. You are able to make repayments to your loan whenever you choose. The smallest repayment you are able to make is 10% of your property value.


If the value of your property has increased over time:

  • Original Property Value - £220,000

  • Increased Property Value - £235,000

  • Initial 20% Equity Loan Borrowed Amount - £44,000

  • New Equity Loan Repayment Amount - £47,000

The current Help To Buy Loan scheme is due to end on the 21st March 2021. If you have already reserved your home and want to apply for the loan, find your local Help To Buy agent here who can guide you on the next steps and check your eligibility.