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Wales: Help to Buy Equity Loan

estate agents Cardiff

Wales: Help to Buy Equity Loan

The Help to Buy Wales Equity Loan scheme could possibly be beneficial to look into if you are finding it challenging to save for a deposit on a new home in Wales.

The Help to Buy Wales Equity Loan initiative, which is similar to the Help to Buy England and Help to Buy Scotland programmes, may enable you to purchase a home with as little as a 5% deposit and a 75% mortgage. You can use a 20% equity loan from the government as part of the Help to Buy Wales programme to cover the remaining balance.

Here is a brief rundown of the essential details of the Wales scheme:

  • The Programme is offered in Wales for related new construction projects up to a value of £300,000.
  • Either first-time purchasers or owners of existing homes are eligible.
  • Buyers must put down a minimum of a 5% deposit at closing.
  • You must reside on the property, which must be the only one you own.
  • The house must have an EPC B rating, at the very least.

How does it work?

Under the Help to Buy Wales initiative, you may now borrow up to £250,000, or 20% of the value of a new construction property. A monthly £1 administrative charge is due starting on the day the programme is initiated. You won’t be required to pay any further fees over the first five years aside from this. You will start paying interest on the money you borrowed in the sixth year, and it will rise every year by inflation, as determined by the Consumer Price Index (CPI), plus 2%. 

It’s important to confirm with your home builder/developer whether they are a participant in the programme as it may not be available for all new construction in Wales. The majority of reputable home builders have already joined this initiative.

What do you need to know about it?

The equity loan must be repaid after 25 years or when the property is sold, whichever occurs first.

You can always sell your house, but you’ll have to pay back the loan — 20% of the market price — when you do. You might have to pay back more than you borrowed if your property’s value rises.

Please contact your local home builders, property professionals, mortgage experts, or specialist financial advisers for additional details and guidance on the Equity Loan scheme.