Help to Buy: Equity Loan

Making it more affordable for you to purchase a home

The Help to Buy: Equity Loan scheme means the Government lends you up to 20% (40% in London) of the price of your newly built home through the Homes and Communities Agency (HCA). This loan makes it more affordable for people to purchase their own home. The equity loan is interest free for the first five years of owning your home.

Buying a Home with Help to Buy: Equity Loan

The Help to Buy: Equity Loan helps you purchase a newly built home by giving you an interest-free loan of up to 20% (40% in London) of the total property value.

To purchase a new home with an equity loan you will need to get approval from the local Help to Buy agent in the area you want to live. You will also need to buy your home from a registered Help to Buy builder. Your Help to Buy agent will have a list of registered builders for you to choose from.

You will pay a monthly management fee of £1 for the length of your Help to Buy home ownership. And after five years, you will need to pay interest on your equity loan. This interest fee is currently 1.75% per year on the outstanding amount of the equity loan. This will increase each year, after the first five years, by the increase in the Retail Price Index plus 1%.

Your Help to Buy agent will provide you with a Personal Working Example (PWE) setting out your future payments.

Equity Loan Voluntary Payments

Similar to the Shared Ownership scheme, you are able to repay all or part of your equity loan by staircasing. These payments can be made at any time, however they must be a minimum of 10% of your home’s current market value. You will need to get an independent valuation of your property.

If you decide to extend your mortgage to fund the full or part repayment of your equity loan, you will need to get approval from the Agency’s Mortgage Administrator first.

The Process – Simplified

  1. Liaise with a mortgage broker and get an agreement in principle.
  2. Complete a Help to Buy Property Information form.
  3. Reserve a property with the Developer.
  4. Receive a list of conveyancers.
  5. Appoint a conveyancer.
  6. Memorandum of Sale – sent by the Developer.
  7. Authority to proceed issued by Help to Buy agent.
  8. Contract issued by the Developer’s solicitor.
  9. Mortgage offer issued.
  10. Authority to Exchange received by the Help to Buy agent.
  11. Exchange within 28 days of the issue of contracts.
  12. Completion – once notice is served.


Things to Know

  • You need approval of your purchase from your local Help to Buy agent.
  • You must purchase your home from a registered Help to Buy builder.
  • Your cash deposit must be at least 5% of the full purchase price.
  • The Equity Loan must be paid back after 25 years, or when you sell your home (whichever is earliest).
  • An Authorisation to Proceed is valid for three months.
  • You must legally complete on your purchase within six months of exchanging contracts.


The Process in Detail

Buying a property with a Help to Buy: Equity Loan


  • You liaise with a mortgage broker to get an agreement in principle for a mortgage and complete a Help to Buy Property Information Form with them.
  • You complete a reservation form and pay a reservation fee to secure your purchase.
  • The Developer will send your Property Information Form and copy of the signed reservation form to your local Help to Buy Agent.
  • The Developer will supply a list of preferred conveyancers to use.


  • The Local Help to Buy Agent will check that you can afford your main mortgage.
  • You will receive an Authority to Proceed from your local Help to Buy Agent within four working days of the Developer submitting the paperwork.

This process may be delayed if you do not complete the form properly.


  • You instruct New Homes Law as your conveyancer  and provide your ID and proof of deposit funds to us.
  • You provide our details to the Developer.
  • You will submit your mortgage application.
  • The Developer will issue a Memorandum of sale to us and their conveyancer.
  • We will send a letter to confirm our instruction by you to the Developer’s conveyancer requesting the draft contract paperwork.

We wait for the Developer’s conveyancer to issue the draft contract to us.


  • We receive the draft contract from the Developer’s conveyancer.
  • We will order searches and enquiries will be raised in response to the draft contract.
  • Once we have received replies to all the enquiries and we have completed the searches, a Contract Report will be prepared for you.
  • You will receive your Contract Report to review, sign and return to us.


  • We will receive a copy of your mortgage offer direct from your lender.
  • We will prepare a mortgage report and send it to you, along with your mortgage deed for you to sign and return to us.
  • We will submit your mortgage offer to the Help to Buy agents for their approval (form I) and request their Authority to Exchange (ATE).


  • We receive all your signed documentation and your exchange deposit.
  • ATE is issued by the Help to Buy agents.
  • We will request your authority to exchange contracts.


  • You will give us the authority to exchange contracts.
  • We will exchange contracts with the Developer’s conveyancer.

You are now legally committed to your purchase. Failure to complete your purchase could result in the loss of your exchange deposit, as well as incurring additional costs.


  • We will let you know that your exchange of contracts has happened.
  • Await notice of completion to arrive from the Developer’s conveyancer if a fixed completion date has not already been set.

At this point of your purchase, everything may go a little quiet whilst we wait for the notice of completion to arrive.


  • Once a completion date is known, we will send you a Completion Statement confirming the balance required from you.
  • We will request the mortgage advance from your lender for the completion date.
  • We will confirm the completion date to the Help to Buy agents (form 2).
  • We will carry out all the necessary pre-completion searches.


  • We will receive all your funds from you and your mortgage lender.
  • Homes and Communities Agency will make its funds available to you via the Developer.
  • We will send the full completion funds to the Developer’s conveyancer.
  • We will receive confirmation from the Developer’s conveyancer that the completion funds have been received.

Congratulations, legal completion has taken place. You are now a home owner!


  • You will be able to collect your keys from the Developer.
  • We will confirm the sale with your local Help to Buy Agent who will register your details with the Agency’s Mortgage Administrator.
  • We will register your purchase with the Land Registry. The wait time for confirmation of registration from the Land Registry can vary, but will be in the region of 6-9 months.

Your questions answered…

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