New England home scheme offers first-time buyers 20% equity loan
The UK government has announced Your First Home, a scheme intended to help first-time buyers in England who earn a regular income but lack a large deposit or family financial support. It matters because it could reduce the upfront savings needed to buy a new-build home and lower monthly costs compared with some standard mortgages.
Eligible buyers would receive a government-backed equity loan worth 20% of the purchase price and need a minimum deposit of 2.5%, leaving a mortgage for 77.5% of the property’s value. The loan would initially be interest-free, and the government says participants could save hundreds of pounds a month compared with a 95% mortgage. Further details are due at the budget on 28 October; the article also invites prospective buyers to share whether they would apply.
- England’s proposed scheme is for first-time buyers of new-build homes.
- Buyers would need a 2.5% deposit and receive a 20% equity loan.
- More details are expected at the 28 October budget.
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Buying a home usually requires a deposit, with a mortgage covering the rest of the price. First-time buyers who do not have family help can find it difficult to save enough, even if they have a regular income.
An equity loan is money towards the purchase that gives the lender a share in the home’s value, rather than working like an ordinary mortgage. Under this proposal, buyers would need a deposit of at least 2.5% and a mortgage for most of the remaining cost, while the government-backed loan would cover part of the price.
The scheme is intended for new-build homes in England. Its effect on buyers’ costs will depend on the full terms, including how the loan is repaid and whether charges apply later.
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Originally published by The Guardian as “Are you a first-time buyer in England? Would the government’s Your First Home scheme help you?”.