Help to Buy is a relatively simple scheme whereby the buyer will be provided a shared equity loan to purchase a new build home. This loan will be the equivalent of 20% of the total purchase price. All buyers must provide a deposit that’s 5% of the property value and take out a repayment mortgage to cover the remaining amount owed on the home.
Here is an example of how this would work based on a property valued at £200,000:
| Monetary Value | Percentage | |
| Your deposit | £10,000 | 5% |
| Help to Buy equity loan | £40,000 | 20% |
| Your mortgage | £150,000 | 75% |
Please note that Help to Buy Wales is not available on all properties and properties must be no more than £300,000 in value.
It’s important before you look to utilise the scheme to purchase your home that you’re eligible and in a position to afford it. There are a few eligibility criteria you should be aware of:
Unlike some other types of loans, your equity loan repayments work a little differently. Your shared equity loan will need to be repaid within a period of 25 years from purchasing your home, but you can complete the payment in full at any time during this period.
Your loan can be repaid either through paying a proportion of the loan granted or you can pay your loan in full without selling your property. This option is known as staircasing and can be done any time after the completion of your home sale. Be aware that the value you pay back must be at least 5% of the market value and you cannot staircase if you are in arrears with your monthly payments.