Help to Buy in Nottingham
We have many first time buyers that buy on our developments in Nottingham, and one of the most attractive reasons, apart from the price, and the level of finish, is the fact that we always have an allocation for the Help to Buy scheme.
This is hugely attractive, and is a government scheme that allows first time buyers to buy with just a 5% deposit! So if the apartment is worth £100,000, you only need to put down £5000 instead of £25,000 – making home ownership much more affordable and realistic for many.
Help to Buy Scheme
The Help to Buy scheme offers an equity loan where the government lends first-time buyers and existing homeowners money to buy a newly-built home. Note, you can’t use the above schemes to buy a second home or a property to rent out.
You put down 5% of the sale price of your new-build (or conversion) flat or house as a deposit, the government lends you up to 20% of the sale price and you borrow the rest (up to 75%) from a mortgage lender, on a repayment basis.
The interest rate you will be charged
You don’t pay any interest or fees on the government’s equity loan for the first five years. In the sixth year, you’ll be charged 1.75%.
After then, the fee rises by inflation based on the Retail Prices Index (RPI) plus 1% each year.
RPI figures are put together by the Office for National Statistics.
See below for an example of how the fees work.
Interest rates for paying back your loan
Years 1-5: no fees
Year 6: 1.75% of the loan
Year 7 onwards: 1.75% + RPI + 1%
These fees do not go towards paying off the government loan.
When you sell your home, or the mortgage is paid off, you have to repay the equity loan plus a share of any increase in the value. It works like this:
Home bought for £200,000, sold for £250,000
|Increase in value||25%|
|Equity loan repayment||£50,000 (£40,000 + 25% profit)|
|Mortgage||£150,000 (less capital repayments)|
|Your share||at least £50,000|
The remaining £50,000 (or more) can be used a deposit on your next home.
The exact amount depends on how much you’ve paid off your mortgage.
You can also pay back part or all of your loan at any time.
The minimum percentage you can pay back is 10% of the market value of your home.
The amount you pay will depend on the market value at the time.
Sound attractive? Keen to look into Help to Buy in Nottingham? Here at Hockley Developments we can assist! We have a mix of 1, 2 and 3 bed properties at all times available on Help to Buy.
For our latest availability, email us at firstname.lastname@example.org or call us on 0800 6348390 and we will be happy to send prices, floor plans and latest availability through Help to Buy in Nottingham. You can arrange a viewing of one of the show apartments and we will happy to assist with any questions you may have.