With Help to Buy, you need a minimum deposit of 5%. The Government will then lend you up to 20% of the cost of your new home (40% in London) and you obtain a mortgage on the remaining 75%.
You could buy a new home worth £500k with a deposit as low as £25k. The government would provide you a loan of up to £100k (20%) and you would need a mortgage for the remainder (in this case £375k).
Help to Buy equity loans are available to everyone - first-time buyers and existing homeowners – on newbuild homes up to £600k. You cannot sublet this home or enter into a part exchange deal on your old home. You have to live in the home you buy and cannot own any other properties.
The loan is interest free for the first 5 years. After five years you will be required to pay an interest fee of 1.75% of the amount of the government loan at the time you purchased your property, rising each year after that by the increase (if any) in the Retail Prices Index (RPI) plus 1% (for more details click here). You can pay the loan back at any time within 25 years or when you choose to resell your home.
* Terms and conditions apply. For more information visit https://www.helptobuy.gov.uk/