Help to Buy Equity Loan (Closed)
The scheme is closed to new applicants, guidance for existing equity loan holders.
Reviewed and signed off by Patricia Ogunfeibo
Solicitor and Chartered Tax Adviser, both non-practising. UK property since 1986.
Last reviewed
- Applies to:
- England
- Last reviewed:
- Next review:
- November 2026
Checked against GOV.UK. Sources are listed at the end of this guide.
Scheme and lender rules can change. How we label evidence.
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Executive Summary
The Help to Buy Equity Loan scheme closed to new applicants in October 2022 and ended entirely in March 2023. It is no longer available for new purchases. However, many homeowners still have active equity loans and need to understand the repayment rules, interest charges, and options for repaying early.
Help to Buy Equity Loan, What You Need to Know
The Help to Buy Equity Loan scheme closed to new applicants in October 2022 and ended entirely in March 2023. It is no longer available for new purchases. However, many homeowners still have active equity loans and need to understand the repayment rules.
If You Already Have a Help to Buy Equity Loan:
Action for Existing Borrowers
If your 5 year interest free period has ended or is approaching, seek independent financial advice about whether to repay the equity loan (for example by remortgaging) before interest costs escalate. Contact the Help to Buy customer service team on 0300 123 4123 for account queries.
| Feature | Details |
|---|---|
| Equity loan amount | The government lent up to 20% of the purchase price (40% in London) as a second charge against the property. |
| Interest free period | The first 5 years are interest free. You pay a £1 monthly management fee only. |
| Year 6 onwards | Interest starts at 1.75% of the original loan amount. The rate increases each April by CPI plus 2% (or RPI plus 1% for loans taken out before 2021). |
| Repayment | You repay the same percentage of the current market value, not the original loan amount. If the property has increased in value, you pay back more. If it has fallen, you pay back less. |
| When you must repay | On sale of the property, when you pay off your main mortgage, or at the end of the loan term (normally 25 years). |
| Partial repayment | You can make part repayments at any time, in blocks of at least 10% of the current market value. A RICS valuation is required for each repayment. |
Action Checklist
Where this comes from
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