The new Help to Buy: Equity Loan scheme was launched on 1 April 2021 and has become exclusively for the use of first-time buyers who have a minimum of a 5% deposit to purchase a qualifying brand new home. The government will lend homebuyers up to 20% of the cost of a newly built home in England and Wales, and up to 40% in London which is interest free for the first 5 years. After 5 years, interest becomes payable and these charges are not capital repayments. The total amount you owe will remain outstanding until the end of the loan term or until you sell the property, unless you have chosen to repay it before this.

The size of the loan available depends on where the property is located and your income. There are regional price caps throughout England and the maximum price using the Help to Buy scheme in Wales is £250,000.
The Help to Buy Scheme can offer buyers higher levels of affordability and lower rates of interest from mortgage lenders. This allows equity to be built up faster when compared to paying a higher rate of interest using the same 5% deposit on a second hand property.