Help to Buy Equity Loan – Secure your new home with only a 5% deposit
(subject to eligibility, terms and conditions)

“The Help to Buy Equity Loan is a fantastic proposition, especially for first-time buyers. It puts the dream of owning your own home within reach, and offers growing families the chance to upsize more quickly.” 

– Mark Howell,  Regional Sales Director at Michael Jones

Buying your own home is probably the largest financial investment that many of us will ever make.

To smooth the transition into home ownership and get you moved into a brand-new home as quickly as possible, we’re here to support you at every step of the way, using the Government’s ‘Help To Buy Equity Loan’ – a low-interest contribution designed to ease the burden of saving for your deposit.

It’s good to know…

The Help to Buy equity loan scheme was updated in April 2021 and will be in place until March 2023. The scheme still enables buyers to purchase a new-build home with just a 5% deposit, but there are some crucial changes in the latest version of the policy. The two main changes are:

  • The scheme is now only available to first-time buyers (previously it was open to existing homeowners as well)
  • There are now regional price caps on how much your new home can cost*

*Terms and conditions apply, see end of article.

How the new Help to Buy Equity Loan works:

The Help to Buy Equity Loan scheme qualifies those who are eligible to buy a newly built home with just a 5% deposit. The Government then supplements this by loaning you up to 20% of the purchase price (or 40% in London). You can then apply for a mortgage to make up the full purchase price of the property.
N.B. Individual circumstances apply, dependent on your income and expenditure.

Repaying the Help to Buy loan:

Under the terms of the loan agreement, you are expected to repay in full, dependent on which of the following scenarios comes first: a) after 25 years, b) at the end of your mortgage term, or c) when you sell your home.

Also, by loaning you 20% towards your deposit, the Government is in effect investing 20% equity in your property. So, while you own 100% of the property, they are entitled to a stake in the profit should you opt to sell. In other words, if your property value goes up, you repay more, but if it goes down, you pay less.

Representative example:

The original purchase price of your home was £300,000 (20% deposit contribution of £60,000 from the Government).

It’s now worth £375,000, meaning that when you come to sell, the amount repayable grows to £75,000, representing 20% of the new value of your home, not the original purchase price.

Pay it off faster: you can pay off part of the loan early should you choose to, either at 10% or 20% of the amount remaining.

Help to Buy loan interest rates:

The 20% equity loaned to you is interest-free for the first 5 years, allowing you breathing room during a time when finances might be stretched. You then begin to pay off the annual interest fee from year 6, which is charged at 1.75% of the loan value and increases each year in line with the Retail Prices Index (RPI) inflation measure, plus 1%.

Representative example:

If the RPI is at 3%, then the interest rate would increase by 4% (3% RPI + 1%). So, since 4% of 1.75% is 0.07%, your interest rate becomes 1.82%.

The good news is that the interest fee is only payable against the original loan amount and is unaffected by any increase in the value of your home (unlike loan repayments). You’ll be contacted prior to the introduction of fees by a local Help to Buy Agent and you’ll also begin receiving annual statements.

Help to Buy Equity Loan eligibility

There are certain restrictions in place to ensure that those who most need the help are those catered for:

  • The home must be a brand-new build, sold by a registered Help to Buy homebuilder
  • It must be your only property, not as a second home
  • You cannot sub-let or rent out the property
  • It must not cost more than the price limit for the region – see table* below:

help to buy equity loan table

*Table source: 

Many of our house builders offer the Help to Buy Equity Loan on new builds, so be sure to speak to one of our team, who will happily advise you on which homes are eligible.


How Michael Jones can help you to buy:

It’s very simple:

1. Visit our website and browse our New Homes section and find a property that takes your fancy.

2. Contact us directly or visit us at your local office – we’ll gladly take you through your different options and answer any questions you might have, including booking in your property viewings (subject to the stage of the new build development).

A few more things to remember…

  • You own 100% of the property! The Government’s ‘share’ is only in the equity loan itself, and therefore a share of the profits. Interest-only mortgages are not applicable – your mortgage must be a repayment loan with interest and capital paid every month.
  • Part-exchange is not available in conjunction with the Help to Buy Equity Loan scheme.
  • Stamp Duty is still applicable when you purchase your home through the scheme, so remember to include that in your budget at the full property market price. For first-time buyers, you will now pay zero stamp duty on the first £300,000 on any home that costs up to £500,000. For further information on the new stamp duty rules click here.
  • Extensions or alterations: you must obtain permission first before commencing any work. This is because significant home improvements are costly, and the Homes and Communities Agency (the loan providers), expect loan repayments to be given priority. Exceptions can be made at the discretion of the Post Sales Help to Buy Agent, especially in instances where alterations are required to cater for a disability.

If you require any further information on the Help to Buy Equity Loan, please contact us and we’ll make finding and moving into your brand-new home as easy as possible.


*Security over your home is required. Help to Buy cannot be used in conjunction with part exchange. Availability of other incentives/offers subject to lenders criteria at Michael Jones’ discretion. Your mortgage lender’s deposit requirements may vary, but you should usually expect to contribute a deposit of at least 5% of the purchase price. Available on selected properties, and subject to the Government’s specific terms, conditions and qualifying criteria. Please check that this mortgage will meet your needs if you want to move or sell your home, or you would like your family to inherit it. If you are in any doubt, please seek independent advice. Your home may be repossessed if you do not keep up repayment on a mortgage or any other debt secured on it. Michael Jones and Co. Chapelworth House, 22-26 Chapel Road, Worthing, West Sussex, BN1 1BE.

Content accurate at time of publishing.

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  • Avatar Sarah C ★★★★★ 3 weeks ago
    Being first time buyers, we were full of questions. Michael Jones couldn’t have been more helpful and everyone we dealt with along the way were great, prompt and professional.A special shout out to Jane who worked with us for the longest … More part of the process; she was amazingly helpful, patient, friendly and a brilliant person to have helping you through this. We are settling in now and just want to say thank you!We would recommend.
  • Avatar F K ★★★★★ 4 weeks ago
    I sold my property through Michael Jones & Bacon in Lancing. I found them professional, thorough and very competent to the point that they did more work than my solicitor especially James Adams. I would also like to mention Oliver Strotten … More and Gary Evans for their professionalism. Thanks a lot for your great work.
  • Avatar Chloe Sturges ★★★★★ a month ago
    We viewed quite a few properties with Michael Jones & Bacon until we found our home. Everyone had great customer service and were really helpful. Although, the star of the show was James! He was friendly, clear and spoke through every … More step with us! He’s been fantastic!! Would definitely recommend.