Help to Buy: Equity Loan

Keen to get onto the property ladder in England but struggling to save a big enough deposit? The Help to Buy: Equity Loan scheme could be for you.

Help to Buy: Equity Loan at a glance


Buyers need to provide 80% of the property value (60% in London), with a minimum 5% deposit.

Equity loan on offer

20% of the property value (40% in London).


Full ownership once the equity loan and mortgage have been repaid.


England only. There are other home ownership schemes in Scotland, Wales and Northern Ireland.

What is Help to Buy?

Help to Buy is a government scheme that helps first-time buyers get onto the property ladder with a 5% deposit.

It’s available on new-build homes, which can come at a premium cost. But who doesn’t love buying something new and shiny? The property must be from a Help to Buy-registered builder.

Help to Buy got a revamp in early 2021. Unlike the previous equity loan scheme, which was available to all buyers, the current version is only open to first-time buyers. 

Regional property price caps have also been introduced, which we explain fully below. The current scheme will run until March 2023.

To be eligible you need to:

  • be over 18 years old

  • be a first-time buyer. You cannot have owned or inherited a property or land anywhere in the world previously

  • have not had any form of Sharia mortgage finance.

If you’re buying a property with someone else, you must both be first-time buyers.

Help to Buy: Equity Loan is one of a number of schemes available to help you buy a home. Others include Shared Ownership, where you buy a share of a home and pay rent on the rest.

“The Help to Buy scheme has helped over 300,000 people make that first step on the housing ladder. We want you to join them so you too can have a place to call your own.”

Christopher Pincher MP

Former Minister for Housing

How does Help to Buy work?

With Help to Buy, the government loans you up to 20% of the property value (rising to 40% in London). You pay a 5% deposit and then take out a mortgage to cover the rest.

The equity loan is interest-free for the first 5 years. After that, you’ll start paying interest at 1.75% in year 6 and more each year after. The amount rises each year in line with inflation.

You have 25 years to repay it unless you sell up before then. If you do, that’s when you’ll need to repay the loan. To avoid paying interest on the loan, it’s best to pay it off within the first 5 years. 

When weighing up your decision, it’s important to remember that the equity loan amount changes in line with the value of the home. 

So, for example, if the property value has risen by 10% at the point you sell it or after 25 years (whichever comes first), you’ll need to pay back more money to settle the loan. If the value falls, you’ll pay back less.

Help to Buy price caps

The following table shows the regional price limits for Help to Buy properties in England:

East Midlands£261,900
West Midlands£255,600
Yorkshire and the Humber£228,100

Help to Buy pros and cons

The pros

  • You only need a small deposit, so could get onto the property ladder sooner 

  • You could get a lower mortgage rate

  • Your monthly costs for the first 5 years are likely to be lower than if you were buying a property without the scheme

The cons

  • The scheme is restricted to new-build homes 

  • Not all lenders offer mortgages to people buying a Help to Buy property. But many big names are part of the scheme

  • If your property value goes up, so too does your equity loan repayment amount

Find Help to Buy properties for sale

How Help to Buy compares to Shared Ownership

SchemeHelp to BuyShared Ownership
OverviewHelps first-time buyers in England purchase a new-build home. Regional price caps are in place. Allows buyers in England to buy part of a property and pay rent on the rest.
BenefitsAllows you to buy a new-build home with a small deposit.Enables you to buy a share of a property with a small deposit.
DepositAt least 5% of the property value. The government tops this up with a loan of up to 20% of the property value (40% in London).At least 5% of your share of the property.
RequirementsYou need to provide 80% of the property value (60% in London) in total. For example, with a 5% deposit and a 75% LTV mortgage. Your annual household income must be less than £80,000 (£90,000 in London).
OwnershipFull ownership once your loan from the government and mortgage have been repaid.Own up to 75% of the property value once your mortgage has been repaid. You can build this share up gradually.

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