Help to buy confusion

UK_AEH

Hi,

I am in the early stages of looking to move house.
When we sell our current home, we should hopefully have 25% to put down on the next house.
If we wait until the next phase of Help to buy kicks in, am I right in thinking I can put down a 45% deposit (with the extra 20% effectively being a free government loan for 5 years)?
If this is the case, surely it's a no-brainier for us to wait an extra 5/6 months and use this scheme.
Thank......

okborednow

I think you're getting the two parts of the scheme confused. Part one is the equity loan and it's available on new builds only. The second part in January is a mortgage guarantee scheme. The government doesn't lend you any money they just promise to cover a percentage of the losses if you default on your 95% mortgage. This is supposed to take some of the risk away for the banks and bring rates down.

In both cases though the scheme has been put in place to help buyers who cannot afford to save a big deposit. As you already have a 25% deposit and there are a lot of competitive rate available for you you wouldn't qualify for either scheme i don't think.

Thrugelmir

The scheme will be targeted at those with a 5% deposit. So in effect those applying for a 95% mortgage. The lenders could block early repayment by levying ERC's that make it uneconomic to do so. May be a while before the scheme small print is published.