The government backed Help to Buy equity loans are available to first-time buyers.
Homebuyers must provide a deposit of a minimum of 5% of the full purchase price with Help to Buy equity loan, subject to eligibility, terms and conditions.
Under Help to Buy the government will lend you up to 40% of the property value in the form of an equity loan. The remaining equity loan must be repaid in full at the end of the equity loan terms when you pay off your repayment mortgage or when you sell your home, which ever comes earlier.
You then need to secure up to a 55% mortgage from a bank or building society (the maximum property purchase price is £600,000 in London).
For the first five years of Help to Buy home ownership the equity loan is interest free. From year six, the interest rate will rise in April each year based on the rate of inflation at the time (according to the Consumer Prices Index), plus 2%.
A monthly management fee of £1 will be applied from the start of the loan for the full term.