How it works
Help to Buy - Wales allows eligible purchasers to buy new-build homes with assistance from the Welsh Government in the form of a shared equity loan.
What does this mean in practice?
Help to Buy - Wales shared equity loans are available to both first-time buyers and home movers wishing to purchase new-build homes worth up to £300,000.
With Help to Buy - Wales, buyers won't be able to sub-let their home.
With Help to Buy - Wales:
buyers need to contribute a deposit equal to 5% of the property price.
the Welsh Government (through Help to Buy (Wales) Ltd) will fund a shared equity loan for up to 20% of the purchase price.
buyers will then need to secure a mortgage to cover the remaining balance.
|For a property worth £200,000||Amount||Percentage|
|Shared equity loan||£40,000||20%|
If in the future the home in the table above sold for £210,000 the buyer would get £168,000 (80%, based on their mortgage and the cash deposit) and pay back £42,000 on the shared equity loan (20%).
The buyer will pay off their mortgage using the proceeds of the sale and will then repay the Help to Buy -Wales shared equity loan.
Are there any fees attached to the shared equity loan?
From the time a buyer receives the shared equity loan they will be charged a small administration fee of £1 per month.
Then, in the 6th year, they'll be charged interest of 1.75% per annum of the original shared equity loan amount. After this, the interest will increase every year. This increase is worked out by using the Retail Prices Index plus 1%.
All buyers will be contacted before the shared equity loan interest starts and they'll also be sent a statement about their shared equity loan each year.
The fees do not count towards paying back the shared equity loan.
Further details of the Help to Buy - Wales shared equity loan can be found in the below guidance document.
Help to Buy – Wales Buyers' GuideFile type: Adobe PDF document | File size: 438KB
Help to Buy - Wales: Shared Equity Loan
We started looking for a home last September but we were struggling to find something we liked within our price range. When we visited Cwm Calon for the first time, we immediately fell in love, and luckily Help to Buy - Wales has enabled us to afford to buy here... Read more
Toby, Cwm Calon.
Other Help to Buy schemes in Wales:
Regular armed forces personnel can benefit from a £200 million scheme to help them get on the property ladder.
The Forces Help to Buy scheme enables servicemen and servicewomen to borrow up to 50% of their salary, interest free, to buy their first home or move to another property on assignment or as their families needs change.
Details are available on the
UK Government website
You can put away up to £200 a month in a Help to Buy: ISA that the government will then top up by 25%, up to a maximum of £3,000.
In the first month you’re also able to put away £1,200 - that’s an extra £1,000 on top of the monthly maximum of £200.
Details are available on the
Help to Buy website