The Help to Buy Equity Loan

Help to Buy Equity Loan

The Help to Buy Equity Loan scheme is open to both first time buyers and existing homeowners. There is no income cap for applicants and you can buy a new-build property with a value of up to £600,000. The scheme helps you to buy your home with an equity loan of up to 20% of the full price of the property. You won't have to pay any interest charges on this loan for the first five years and you own 100% of your own home from the start.


Help to BuY Equity Loan


How does the Equity Loan work?

You buy 100% of a brand new home from a developer who is registered for the scheme.  You fund 80% of the purchase through a combination of a mortgage and your deposit; the remaining 20% is covered by an ‘equity loan’ from the government. 

Please note: When you purchase your new home you will pay a monthly management fee of £1 which continues until the equity loan is repaid.

The equity loan is interest free for the first five years.  From year six, you’ll start paying a monthly administration fee on the equity loan.  These are not repayments of the loan itself.

Your mortgage and deposit: You must have a mortgage to be able to buy using the Help to Buy Equity Loan scheme as the equity loan has to be registered as a second charge against the mortgage.  You will need a minimum 5% deposit, along with a 75% mortgage, but you can put in a higher deposit to reduce your mortgage if you wish.  The minimum mortgage level acceptable under this scheme is 25% of the full purchase price.  

When we receive your Help to Buy Equity Loan application, we will check the documents to make sure they’re fully completed. It's important that you can sustain your purchase financially and are not over-stretching yourself so we will check to make sure you meet the Homes and Communities Agency’s (HCA) sustainability criteria. 

Click on the link to access the HCA' s Equity Loan affordability calculator: Help to Buy EL calculator FINAL Nov 15.xls [xls] 120KB

Click on the link for Equity Loan calculator guidance: Equity Loan calculator guidance - Nov 15 v2.pdf [pdf] 457KB

How do I find a Help to Buy Equity Loan property?

Help to Buy Equity Loan properties are available from participating registered developers. Properties up to a value of £600,000 can be included in the scheme. You can find details of registered developers offering Help to Buy properties across the midlands here or through our online property search.

How do I apply for Help to Buy Equity Loan?

When you have found a suitable property (which will need to be a newly built property from a participating developer) you will need to follow these steps:

When we receive your forms, we will check them to make sure they’re fully completed.  It’s important that you can sustain your purchase financially and are not over-stretching yourself so we will check to make sure you meet the Homes and Communities Agency’s sustainability criteria.  Once  these checks are completed, and provided your purchase meets sustainability criteria, you will be issued with an Authority to Proceed (ATP) document. Please do not apply for a mortgage prior to receiving this document.

Your Authority to Proceed will then outline the next steps – please make sure you read the Help to Buy Buyers' Guide October 2016 [pdf] 319KB as this contains a lot of important information about the scheme.

Please note:

  • At present part exchange is not available on the Help to Buy Equity Loan scheme
  • You cannot own two properties at the same time under the Help to Buy Equity Loan scheme
  • You will need to be able to get a mortgage to buy through the Help to Buy Equity Loan scheme

Repaying your Equity Loan

You can repay your Help to Buy Equity Loan any time up to 25 years after you took it out.  If you haven’t paid it back before, you must pay it back after 25 years.  If you move, you will need to repay your loan at that point.  You cannot transfer an existing loan to a new property.  If you redeem your mortgage, the equity loan will have to be paid back at the same time.

The amount you repay is linked to the value of your property.  If you took out a 20% equity loan, the amount you pay back will be 20% of the current value of your property. So if the value of your homes goes up, the amount you pay back, also goes up.  If the value of your home goes down, the amount you pay back also goes down, so you are protected if property prices fall after you buy.

 Your Help to Buy Equity Loan will be interest free for the first five years; from year six a fee of 1.75% applies which increases annually by RPI plus 1%.  Please note that these payments are a fee on the loan – they are not repayments of the loan itself.

Applying for the Help to Buy Equity Loan in 5 Easy Steps

Watch our short film which explains the Help to Buy Equity Loan application process in 5 easy steps.

How does the Help to Buy Equity Loan conveyancing process work?

If you’re buying a property using the Help to Buy Equity Loan scheme, Help to Buy Midlands will oversee the conveyancing process. (Conveyancing is the term for the administrative, financial and legal processes of buying and selling properties).  There are certain milestones where we will need to confirm to your solicitor that they can move on to the next stage.  Most of the time, we’ll be communicating with your solicitor so you won’t have to worry about these milestones, but if you would like to know more about the process, here are some details:



So the first thing you will do is reserve your home with the developer and fill in the application form for the Help to Buy Equity Loan.  This application form is called a Property Information Form (PIF).  Most people will talk to a financial advisor or mortgage broker at this point.  You, or your financial advisor, will need to send electronic copies of your Reservation form and your PIF to us at,uk

You’ll need to find a solicitor to help with your conveyancing and we’d always recommend that you choose someone who is familiar with the equity loan scheme.  You can find a list of solicitors who regularly work on Help to Buy applications here but you are free to choose a different company if you want.


Authority to Proceed:

Once we’ve received your PIF and Reservation forms, we’ll check to make sure you’re eligible for the scheme and that you can sustain the purchase financially.  The government doesn’t want anyone to over-extend themselves financially and then have difficulties later paying their mortgage or interest payments. 

If we approve you for the scheme (and most people are approved), we’ll issue a document called an Authority to Proceed (ATP).  This document confirms to you, the developer, and your solicitor that you meet the criteria for the equity loan scheme and the conveyancing process can begin.  We will send a copy of the ATP to you, your solicitor, and the developer.  The ATP is valid for 3 months but most people will move onto the next stage sooner than this.


Authority to Exchange:

Your financial advisor will need a copy of your ATP so they can start to broker your mortgage for you.  Your lender will need to be signed up to the Equity Loan scheme – there are over 15 lenders who offer mortgages currently so you shouldn’t have difficulty finding one.  As part of getting a mortgage offer, your lender will want a current valuation of your property – you will probably have to pay for this valuation to be done. 

Meanwhile your solicitor will be completing various questionnaires and searches on your behalf.  They will also gather together copies of your Mortgage Offer, valuation and a form called a CML (Council of Mortgage Lenders) form which lists any incentives the developer has offered you.  Incentives might include such things as turfing your garden, white goods, paying your stamp duty or other discounts.  The total value of any monetary incentives should not be more than 5% of the value of the property.

Once your solicitor has your Mortgage Offer, valuation and CML form and you are ready to exchange contracts, they will send copies of these documents to us with a request for authorisation to go ahead with exchanging contracts.  We’ll check that all the forms are accurate and consistent and then issue your solicitor with what’s called an Authority to Exchange (ATE).  Your solicitor will then exchange contracts between you and the developer.  Once you’ve exchanged contracts, you have up to 6 months to complete the purchase.  Some people will complete shortly after exchange but you may have to wait if your property isn’t ready yet.



When your property is ready and you and the developer know the exact date when you want to complete your purchase, your solicitor will apply to us for authority to go ahead.  We will again check to make sure that all the forms your solicitor has sent to us are accurate and complete and then we let the developer know that it’s ok to go ahead by issuing them with a form called a Confirmation to Developer (CTD).  This is the final milestone and once the developer has the CTD, they can go ahead and complete on your purchase.  Some smaller developers will need to allow enough time between exchanging contracts and completing for the equity loan to be transferred from the government.  We recommend that developers allow 15 working days for the money to come through.


Complicated?  Not really…

This may sound complicated but it really isn’t.  Most of the paperwork will be done either by us, your solicitor or your financial advisor.  Most of the time we’ll be communicating directly with your representatives, rather than having to come to you.   And once you’ve completed, you can move into your lovely new home.

I am a developer wishing to register for Help to Buy Equity Loan funding

Homes and Comunities Agency's logo linking you to the HCA website on Help to Buy If you are not already signed up for funding, you can find the registration document and submission forms at Homes and Communities website.

Developers can contact the HCA regarding Help to Buy at Please note this e-mail address is only for developers with queries relating to Help to Buy Equity Loan, not for general enquiries.