Help to Buy Wales
You could be moving into your brand new home with only a 5% deposit!
Thanks to the Welsh Assembly government scheme equity loans are now available for homes worth up to £300,000. With Help to Buy Wales the Welsh Government will lend you up to 20% of the property value through an equity loan. You’ll only need to secure up to a 75% mortgage from a bank or building society. You won’t be charged any loan fees for the first 5 years of owning your own home.
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
Example Undertaking
| For a property worth £200,000 | Amount | Percentage |
| Cash deposit | £10,000 | 5% |
| Shared equity loan | £40,000 | 20% |
| Your mortgage | £150,000 | 75% |
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.
