Help to Buy

Help to Buy

Help To Buy offers an easy and affordable way for you to claim your place on the property ladder

How The Help To Buy Scheme Works

Rockfield Homes have a wide choice of options that can help you to purchase your next home without breaking the bank. The Government will lend you up to 20% of the purchase price of your chosen property, provided that you have paid a deposit of at least 5%. The remainder of the purchase price will come from a mortgage as normal.

If you chose a property that is within one of the London boroughs, the Government will double its contribution up to as much as 40% of the purchase price. The maximum property price that will qualify for a Help To Buy loan currently stands at £600,000.00.

Open To All

Help To Buy is not only available for first time buyers, you can use it to buy properties whatever your stage in life. You can, however, only benefit from the scheme if you purchase a new build property which is intended to be your only residence. The scheme is not available to buyers looking to purchase a second home, an investment property or if you are planning to rent out any part of the property.

What Is Help To Buy?

Help To Buy is a shared equity scheme, which means that when you finally repay the loan, the government will share in any increase or decrease in the value of the property at that time.

Here is an example of how Help To Buy works:

You buy an apartment for £200,000 outside of London. Your deposit and your mortgage comes to the minimum value of £160,000 – being 80%. In this scenario the Government lends you the maximum it can under the scheme, being £40,000 or 20%.

A couple of years down the line you decide to move on, the property is now worth £250,000. When you sell the apartment you have to repay your Help To Buy loan, taking into account the fact that it is a shared equity scheme. In this example you would need to repay £50,000 being 20% of the new value of the property. If the value of your apartment had decreased throughout your ownership you would still only have to pay 20% of the sales value, even if it equals less than the original loan amount.

How Much Does Help To Buy Cost?

From the beginning you will pay a monthly management fee of £1.00, and for the first five years that is all you will pay.

After the initial 5 years you will need to pay an interest amount that starts at 1.75 % of your loan, and increases each year by the RPI + 1%. Here is an example of the costs:

You borrow a total amount of £40,000 from the Help To Buy Scheme. In years 1 to 5 you simply pay £1 per month. In year 6, you will also have to pay a monthly interest fee of £58.00, making your total monthly repayment £59.00.

If the RPI (Retail Price Index) is rising by as much as 5% per annum, for example, your repayments could rise to as much as £75.00 per month by the end of year 10.

Don’t forget that your Help To Buy fees are an additional cost on top of your monthly mortgage payments.

Early Repayment

You can repay your Help To Buy loan at anytime, either in full or by way of instalments, providing that these are at least 10% of the market value of the property at that time.

However you choose to pay the loan, you will need to settle it in full if you sell the property or at the end of 25 years, whichever is the earlier.

Find Out More About Help To Buy With Rockfield New Homes

Our representatives would be happy to explain how Help To Buy works in more details if you require them to. Talk to us today to see how we can help you buy your dream home in Bedfordshire.

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