Yesterday the Government announced mortgage lenders had
agreed to support customers experiencing personal
financial difficulties as a result of Coronavirus
(Covid-19), including through payment holidays, among
other options.
This approach will also be adopted where necessary for
Help to Buy customers paying interest on their Equity
Loans.
Help to Buy: Equity Loans are interest-free for the
first five years. Therefore, today’s announcement will
apply to those who took out the loan before 31 March
2015.
Help to Buy Director Will German at Homes England said:
“We will do all we can to support Help to Buy customers
through this unprecedented period of economic
uncertainty.
“Like other lenders, we will offer payment holidays for
those who are struggling to pay interest fees on their
equity loans.
“We will also offer a range of flexible payment options
to defer interest payment for a period. In all cases,
we will seek to support households in difficulty.
“We understand monthly mortgage payments tend to be the
largest outgoing for the vast majority of households.
Where households also have equity loan payments under
the Help to Buy scheme, we are keen to reassure them
that we will offer similar options to their main
mortgage lender.
“We will assess all cases of hardship on a case-by-case
basis. The first step is for customers experiencing
difficulty related to Coronavirus to contact their main
mortgage lender to discuss revised payment
arrangements.
“They should then contact our equity loan administrator
to discuss the options available to them.
“Please don’t struggle in silence. As soon as you think
you might have difficulty making payments on your Help
to Buy: Equity Loan account, get in touch - help is at
hand.”
The Government has announced measures to provide
support for public services, individuals and businesses
to ensure the impact of COVID-19 is
minimised. Further
information can be found here
Note to Editors:
The Help to Buy: Equity Loan scheme began on 1 April
2013 with the aim of improving home affordability for
potential homeowners and driving up new housing supply.
A Help to Buy: equity loan is an equity loan on a
new-build home with a purchase price of up to £600,000.
Borrowers pay 5% deposit; the Government lends up to
20% (up to 40% in London) and a mortgage of up to 75%
(55% in London) makes up the rest.
The current equity loan scheme, which is open to first
time buyers and people moving up the property ladder
ends on 31 March 2021. It will be replaced with a new
scheme on 1 April 2021 for first time buyers only.
Help to Buy: Equity Loans are interest-free for the
first five years. From then on it is payable at an
interest rate of 1.75%, plus 1% above the Retail Price
Index (a measure of inflation).
Homes England is the government’s housing accelerator.
We have the appetite, influence, expertise and
resources to drive positive market change. By releasing
more land to developers who want to make a difference,
we’re making possible the new homes England needs,
helping to improve neighbourhoods and grow communities.
