Option 1: equity loan

  • New build only
  • You’ll need a minimum 5% deposit to qualify
  • This expands the existing First Buy scheme and is now available to all, not just first-time buyers
  • The Government will lend you up to 20% of the value of your property through an equity loan, which can be repaid at any time or on the sale of your home
  • The loan is interest free for the first five years. From year six a fee of 1.75% is payable on the equity loan, which rises annually by RPI inflation plus 1 %
  • So you will only need to secure up to a 75% mortgage from a bank or building society
  • The expanded scheme is available from 1 April 2013. It will run for 3 years and provide £3.5billion of additional investment
  • Maximum home purchase of £600,000

Option 2 : mortgage guarantee

  • New build and existing homes
  • You’ll need a deposit of as little as 5% for this scheme
  • Available to existing homeowners as well as first-time buyers
  • You’ll need to secure a mortgage for your purchase. The Government guarantee will encourage lenders to offer better access to low-deposit mortgages
  • Available from January 2014, this scheme will run for 3 years
  • Maximum home purchase of £600,000

For more information: http://www.bbc.co.uk/news/uk-politics-21851965