What Is the Help to Buy Scheme?

The Help to Buy equity loan scheme was started by the UK government. It helps first-time buyers get a new-build home. Here's how it works:

• Buyers can borrow up to 20% (or 40% in London) of the property’s value as an interest-free loan for the first five years.
• The loan is interest-free for the first five years, then you start paying interest on what you still owe.
• You pay back based on the current market value of your property, not the original price.

Now, as the scheme ends, many are looking to repay their Help to Buy loan. Our Help to Buy repayment calculator can help with this.

Why Use a Help to Buy Repayment Calculator?

Calculating what you owe can be tricky because it's based on your home's current market value. A Help to Buy calculator makes it easier.

Our Help to Buy repayment calculator lets you:

✔ Estimate how much you owe based on your home’s latest valuation.
✔ Plan your finances by understanding repayment options.
✔ Compare selling vs. repaying early to see which is more cost-effective.
✔ Avoid surprises by calculating potential interest charges after the interest-free period ends.

How Does the Help to Buy Mortgage Calculator Work?

To use our Help to Buy repayment calculator, you need:

1. Your property’s current market value – You can get an estimate from an estate agent or a surveyor if you don't have one.
2. The percentage of the loan borrowed – Usually 20% (or 40% in London).
3. The original purchase price – This helps compare your repayment amount to your initial loan.

Just enter these details into our Help to Buy mortgage calculator. It will show you:

• Your outstanding loan balance
• Any applicable interest charges
• The total repayment amount if you choose to pay off the loan in full

How to Repay Your Help to Buy Loan

There are three main ways to repay your Help to Buy loan:

1. Sell Your Property

If you sell your home, you must repay the equity loan based on the current market value of the property.

For example:

• If your home was originally worth £200,000, and you borrowed 20% (£40,000), that same 20% applies to the current value.
• If your home’s value increases to £250,000, you’ll now owe 20% of £250,000 (£50,000)—not the original £40,000.

This means that the amount you repay increases if your property value goes up.

2. Remortgage to Repay the Loan

Another good choice is to remortgage your home. This way, you can pay off the Help to Buy loan.

• This lets you own your home fully without government help.
• By remortgaging before the interest-free period ends, you avoid extra costs.
• Our Help to Buy mortgage calculator helps compare repayment options.

3. Pay Off the Loan in Full or in Part (Staircasing)

You don't have to pay the whole loan at once. You can repay in chunks (staircasing) if you like.

• You can make partial repayments of at least 10% of your home’s market value.
• If your home is worth £300,000, you must repay at least £30,000 (10%) at a time.
• This reduces what you owe and can lower future interest payments.

Our Help to Buy repayment calculator shows the cost of each partial repayment.

Understanding Help to Buy Interest Charges

What Happens After 5 Years?

After the interest-free period ends (after 5 years), you start paying interest on your loan.

Here’s how it works:

• In year 6, you’ll pay 1.75% interest on the loan balance.
• Each year after, the interest increases by 1% plus inflation (RPI).
• The interest applies to the original loan amount, not the current value.

For example, if your Help to Buy loan was £40,000, the first-year interest payment would be:

• 1.75% of £40,000 = £700 per year (£58.33 per month).

As the interest increases annually, the longer you wait to repay, the more you’ll pay in total.

Our Help to Buy interest calculator can help estimate your future costs.

How to Use the Help to Buy Calculator for an Accurate Estimate

Here’s how to get an accurate repayment estimate with our Help to Buy calculator:

1. Enter your property’s latest market value – Use an estate agent’s valuation.
2. Select the percentage of the loan you borrowed – Usually 20% (or 40% in London).
3. See your repayment amount instantly – The calculator will show the amount you need to repay today.
4. Compare options – If you're considering selling, remortgaging, or staircasing, the calculator can help you decide.

Frequently Asked Questions (FAQs)

1. Can I repay my Help to Buy loan early?

Yes, you can repay the loan early in full or in 10% increments.

2. What happens if my property value decreases?

If your property value falls, your repayment amount will also decrease. It's still based on 20% of the current value.

3. How do I get an official property valuation?

You’ll need a RICS-certified surveyor to provide an official valuation for repayment purposes.

4. Can I use a personal loan to repay my Help to Buy loan?

Yes, but a remortgage is usually a more cost-effective option.

5. What if I can't afford to repay the loan?

If you can’t afford repayments, contact Homes England for help. Or, think about remortgaging.

Final Thoughts: Plan Your Help to Buy Repayment Today

When your interest-free period ends or you plan to move, knowing your Help to Buy repayment options is key. Our Help to Buy repayment calculator helps you figure out costs and plan.

✅ Avoid unexpected costs
✅ Compare repayment options
✅ Make informed financial decisions