Help to Buy Equity Loan | NatWest

Help to Buy: Equity Loan

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Help to Buy
Add your signposting title here… What is a Help to Buy Equity Loan?

Are you a first-time buyer and finding it difficult to get onto the property ladder? If you're struggling to afford the mortgage on 100% of a home; a Help to Buy Equity Loan scheme can offer the boost you need to make it onto that first rung.

Help to Buy Equity Loan schemes can help you by taking out a loan, which you add to your deposit for the house you want to buy. Then you take out a shared equity mortgage on the remaining part of the property's price.

Although the name ‘equity loan’ suggests that you are sharing your property purchase with someone else, you would actually own 100% of the property. The 'loan equity' part just means that you're taking out a loan which counts towards your deposit.

Having this bigger deposit can potentially help you buy a property earlier than you otherwise could have done, and you might also be able to find cheaper mortgage deals, as your deposit would be boosted.

How does a Help to Buy Equity Loan work?

  • Allows first-time buyers and home movers to put down a 5% deposit on a new-build home worth up to £600,000, with up to 20% of the cost of the property covered by a shared equity loan 
  • You can repay the loan at any time during the term of the mortgage, or when you sell your property
  • The value of this loan is linked to the value of the property you’ve bought so, if this rises over time, the loan amount you have to pay back will also change

How much would I need to contribute?

  • You’d need to contribute at least 5% of the property price as a deposit
  • The government will give you a loan for up to 20% of the price
  • You'd need a mortgage of up to 75% to cover the rest



For a property worth £200,000



Cash deposit £10,000 5%
Equity loan £40,000 20%
Your mortgage £150,000 75%


Are there any fees?

  • You won’t be charged loan fees for the first 5 years of owning your home.
  • There’s no interest to pay on the loan for the first five years, but after that, you have to pay a fee of 1.75% of the loan’s value, and this increases every year by the Retail Prices Index (RPI) measure of inflation, plus 1%.
  • Fees don’t count towards paying back the equity loan.

What happens when I want to sell my home?

  • You must pay back the loan after 25 years or when you sell your home - whichever is earliest, and you can pay back part or all of your loan at any time
  • How much you pay back will depend on the market value at that time, but the minimum percentage you can pay back is 10% of the market value of your home




Market value of your home

Equity loan taken out


Bought for £200,000 20% Borrowed £40,000
Sold for £250,000 20% Pay back £50,000

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