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Help to Buy Equity Loan Guide

Help to Buy
Conveyancing Guide

The Help to Buy scheme is closed to new applicants, but thousands of buyers still have equity loans outstanding. Whether you are selling, remortgaging, or repaying your loan, we can help.

Help to Buy closed to new applications in October 2022
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How It Works

How the Help to Buy equity loan works

Under the Help to Buy: Equity Loan scheme, the government lent eligible first-time buyers up to 20% of the purchase price (40% in London) interest-free for the first five years. The loan is secured against your property as a second charge behind your mortgage.

Example: How the equity loan is calculated

£200,000
Original purchase price
£40,000
Equity loan (20%)
Repay £50,000 (20%)
If property now worth £250,000

The equity loan is repaid as a percentage of the current value — not the original loan amount. If the property has increased in value, you repay more.

Our Services

Help to Buy conveyancing services

Selling a Help to Buy property

When you sell, the equity loan must be repaid from the sale proceeds. We obtain a redemption figure from Homes England, manage the repayment, and discharge the second charge as part of the sale conveyancing.

Remortgaging a Help to Buy property

Remortgaging with an equity loan is more complex than a standard remortgage. We obtain Homes England's consent, liaise with your new lender, and manage the process from start to finish.

Repaying the equity loan

You can repay the equity loan at any time — in full or in part (minimum 10%). We manage the repayment process, including obtaining the RICS valuation, calculating the repayment amount, and discharging the second charge.

Help to Buy ISA and LISA claims

If you have a Help to Buy ISA or Lifetime ISA, we claim the government bonus on your behalf as part of the conveyancing process. We advise on the rules and ensure the bonus is claimed correctly.

Interest Charges

When does interest start?

The Help to Buy equity loan was interest-free for the first five years. After five years, you pay a management fee of 1.75% of the loan value per year, rising annually by the Consumer Price Index (CPI) plus 2%.

Years 1–5
Interest-free
No interest or management fee
Year 6 onwards
1.75% per year
Rising annually by CPI + 2%
On sale/repayment
% of current value
Same % as original loan

If your equity loan is now in the interest-charging period, repaying it may save you money in the long run. Speak to a financial adviser about your options.

Common Questions

Help to Buy FAQs

Is Help to Buy still available?
The Help to Buy: Equity Loan scheme closed to new applications in October 2022. However, many buyers who used the scheme still have an equity loan outstanding. If you have a Help to Buy equity loan, you will need specialist conveyancing advice when you come to sell, remortgage, or repay the loan. We have extensive experience of all of these transactions.
How does the Help to Buy equity loan work?
Under the Help to Buy: Equity Loan scheme, the government lent you up to 20% of the purchase price (40% in London) interest-free for the first five years. After five years, you pay interest on the loan. The loan is secured against your property as a second charge. When you sell or repay the loan, you repay the same percentage of the property's current value — not the original loan amount. So if the property has increased in value, you repay more.
What happens when I sell a Help to Buy property?
When you sell a Help to Buy property, the equity loan must be repaid from the sale proceeds. The amount you repay is calculated as a percentage of the sale price — the same percentage as the original loan (e.g. if you borrowed 20%, you repay 20% of the sale price). Your solicitor will obtain a redemption figure from Homes England and manage the repayment as part of the sale conveyancing.
Can I remortgage a Help to Buy property?
Yes, but it is more complex than a standard remortgage. Homes England (who administer the scheme) must consent to the remortgage. Your new lender must be approved to lend on Help to Buy properties. You cannot borrow additional funds against the property without repaying the equity loan first. We handle Help to Buy remortgages and will guide you through the process.
How do I repay the Help to Buy equity loan?
You can repay the Help to Buy equity loan at any time — either in full or in part (minimum 10% of the property's current value). You will need a RICS valuation of the property. Homes England will calculate the repayment amount based on the current value. Your solicitor manages the repayment process and registers the discharge of the second charge at Land Registry.
What is a Help to Buy ISA and can I still use it?
The Help to Buy ISA closed to new applicants in November 2019. However, existing account holders can continue to save and use their ISA bonus until November 2029. The government adds a 25% bonus (up to £3,000) to your savings when you buy your first home. Your solicitor claims the bonus on your behalf as part of the conveyancing process. The Lifetime ISA (LISA) is the current equivalent for first-time buyers.
What is a Lifetime ISA and how does it affect conveyancing?
A Lifetime ISA (LISA) allows first-time buyers to save up to £4,000 per year with a 25% government bonus (up to £1,000 per year). The LISA can be used towards the purchase of a first home worth up to £450,000. Your solicitor claims the LISA bonus on your behalf as part of the conveyancing process. There are specific rules about when and how the bonus can be claimed — your solicitor will advise you.

Related Guides

You may also find these helpful

First Homes Scheme Guide

The current government scheme for first-time buyers — a 30–50% discount on new build homes.

Stamp Duty Calculator

Calculate your SDLT — includes first-time buyer relief.

First-Time Buyer Guide

The complete conveyancing process for first-time buyers — step by step in plain English.

Need Help to Buy conveyancing advice?

Whether you are selling, remortgaging, or repaying your equity loan, our solicitors will guide you through the process.

Call 01244 757 352

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