How The ‘Help To Buy’ Scheme Works


Axminster Homes are please to be part of the The Governments ‘Help to Buy’ scheme, which has been very successful for several years in the UK, helping hard-working people like you take steps to buy your own home. Whether you want to get onto the housing ladder or move up it, ‘Help to Buy’ makes it possible to buy a new-build or existing home priced up to £600,000 with as little as a 5% deposit.

From the image of the three houses above you’ll see the first house shows the selling price of a 2-bedroom apartment in Mitchell Gardens is £189,950.   The 2nd house show that traditionally you’d need a 25% deposit for new home.  With a traditional mortgage you’d have to pay £47,487.50 cash up-front.   The 3rd house show you only need a 5% deposit … which is a much more manageable £9,497.50.  This is because the Governments ‘Help To Buy’ scheme will give your mortgage company the other 20% for the deposit.

With a Help to Buy: equity loan the Government lends you up to 20% of the cost of your new-build home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.

You won’t be charged loan fees on the 20% loan for the first five years of owning your home.

Example: for a home with a £200,000 price tag



Dream of owning a bigger home but don’t have a big deposit?
Help to Buy is here to help. And it’s not just for first time buyers. Help to Buy can help you get onto the property ladder, or move up it.

What happens when I sell?

If you new home, as in the example above was £200,000 new,  you would have put in a total of £160,000 … with the 5% deposit in cash of £10,000 and a 75% montage of £150,000.  If in a few years you sold  your house for say £210,000, you’d receive 80% of the selling price = £168,000.  This covers your mortgage and the cash deposit.   The remaining 20%, which is now £42,000 will be automatically repay the loan.  There is no interest on the money, but the government will keep any additional money IF there is an increase on their 20% on the new selling price (i.e. 20% on the £210,000 is £42,000).



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