How do you repay a Help to Buy equity loan in England?

Full answer

The Help to Buy: Equity Loan scheme (2021-2023 version) closed to new applicants in October 2022. However, many existing borrowers still hold an equity loan and will need to repay it at some point. The equity loan is held by Homes England (the government agency) and is interest-free for the first five years, with a management fee of 1.75% per year from year six, rising annually by CPI plus 2%. When you must repay The equity loan must be repaid in full when: -- You sell your home. -- Your mortgage term ends. -- You reach the end of the equity loan term (typically 25 years from the completion date). You can also choose to repay early -- either in full or in part (staircasing). How the repayment amount is calculated You borrowed a percentage of the original purchase price -- 20% outside London, or up to 40% in London for eligible buyers. When you repay, you pay that same percentage of the current market value of the property, not the original loan amount in pounds. For example: if your home cost GBP 250,000 and you borrowed 20% (GBP 50,000), but your home is now worth GBP 350,000, you repay 20% of GBP 350,000 = GBP 70,000. The repayment process step by step 1. Contact Homes England (Target HCA, the loan servicer) to request a repayment or staircasing. 2. Commission a RICS-registered surveyor to carry out an independent valuation. The surveyor must be approved by Homes England. You pay for this -- typically GBP 200-500. 3. Target HCA confirms the repayment figure based on the valuation (valid for 3 months). 4. Instruct a solicitor (conveyancer) registered on the Help to Buy panel to handle the legal work. 5. Arrange funds -- from savings, remortgaging, or proceeds of sale. 6. Your solicitor completes the repayment and Homes England releases its legal charge on the property. Staircasing (partial repayment) You can repay in minimum 10% tranches. For example, if you borrowed 20% you could repay 10% now (reducing the loan to 10% of the current value) and the remaining 10% later. Each tranche requires a fresh valuation and solicitor. Fees involved -- Valuation fee: GBP 200-500 each time. -- Solicitor's conveyancing fee: typically GBP 500-1,500. -- Any mortgage arrangement fee if you remortgage to fund the repayment. -- Annual management fee (1.75% of the outstanding equity loan value, rising by CPI+2% each April after year five). Current scheme status The Help to Buy: Equity Loan scheme is closed to new applicants. The government has not announced a direct replacement. First-time buyers in 2026 are directed to the Mortgage Guarantee Scheme and the LISA as alternatives.

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