Understanding the Help to Buy Scheme
The Help to Buy scheme was introduced by the UK government to help first-time buyers and those looking to move up the property ladder purchase a home with as little as 5% deposit. The scheme was designed to help people with lower income or those who are struggling to save the large amount of deposit required to purchase a home.
Types of Help to Buy Schemes
There are currently two types of Help to Buy schemes available in the UK. These are the Help to Buy Equity Loan and the Help to Buy ISA.
Help to Buy Equity Loan
This scheme provides a government loan of up to 20% of the value of a new build property, allowing buyers to put down a smaller deposit of just 5%. The government loan is interest-free for the first five years and can be repaid at any time or when the property is sold, whichever comes first.
The Help to Buy Equity Loan scheme is available to both first-time buyers and existing homeowners who are looking to move up the property ladder. The maximum property purchase price for this scheme is currently £600,000.
Help to Buy ISA
The Help to Buy ISA is a savings account designed to help first-time buyers save up for a deposit. The government will top up your savings by 25%, up to a maximum of £3,000. To be eligible for the scheme, you must be a first-time buyer and have never owned a property before. You can save up to £200 per month in the Help to Buy ISA, with an initial deposit of up to £1,200.
The Help to Buy ISA is available until November 2019, so if you are a first-time buyer looking to save up for a deposit, now is the time to open an account.
Eligibility for Help to Buy Schemes
To be eligible for the Help to Buy scheme, you must meet certain criteria. These include:
– You must be a first-time buyer or an existing homeowner who is looking to move up the property ladder.
– You must have a deposit of at least 5% of the property value.
– The property you are purchasing must be your main residence.
– The maximum property purchase price for the Help to Buy Equity Loan scheme is currently £600,000.
It is important to note that the Help to Buy scheme is not available for buy-to-let properties or second homes.
Benefits of Help to Buy Schemes
The Help to Buy scheme has a number of benefits for first-time buyers and those looking to move up the property ladder. These include:
– Lower deposit requirements, allowing buyers to purchase a property with as little as 5% deposit.
– Access to more affordable mortgage rates, making it easier to budget for monthly repayments.
– The Help to Buy Equity Loan is interest-free for the first five years, helping to reduce monthly repayments.
– The Help to Buy ISA provides a government top-up of up to £3,000, helping first-time buyers to save up for a deposit.
Conclusion
The Help to Buy scheme is a great way for first-time buyers and those looking to move up the property ladder to get on the property ladder with a lower deposit. There are currently two types of Help to Buy schemes available, the Help to Buy Equity Loan and the Help to Buy ISA, both of which have different eligibility criteria and benefits. If you are a first-time buyer or someone who is struggling to save up for a deposit, the Help to Buy scheme could be the solution you have been looking for.
2023-05-03 10:26:15
