Help to Buy Equity Loan Repayment 2026: How It Actually Works

How the Help to Buy equity loan works

Help to Buy (Equity Loan) ran in England from 2013 until the scheme closed to new applications in March 2023 (with completions allowed slightly later). While no new loans are being issued, hundreds of thousands of existing borrowers are still repaying loans taken out under the scheme, and understanding the repayment mechanics remains highly relevant in 2026 as more borrowers reach the 5-year interest-free cliff-edge or look to sell or remortgage.

Under the scheme, the government lent buyers up to 20% of a new-build property's value (up to 40% in London), on top of a minimum 5% cash deposit and a standard mortgage for the remainder.

The interest-free period and what happens after

Worked example of rising interest charges

For a £40,000 equity loan (illustrative figures — RPI varies year to year so treat this as a pattern, not a guaranteed figure):

Because the rate compounds on an RPI-linked basis rather than staying flat, the interest cost can rise considerably over a decade or more if the loan isn't repaid or reduced.

Why repayment is based on current value, not the original loan

This is the detail that surprises many borrowers: when you repay your Help to Buy equity loan — whether in full or through staircasing — the amount you owe is calculated as your fixed percentage share of the property's current market value at the time of repayment, not the cash amount you originally borrowed.

Worked example

This mechanism means Help to Buy is fundamentally different from a normal secured loan, where the amount owed simply reduces as you make repayments and is unaffected by house price movements.

Staircasing: partial repayment

"Staircasing" lets you buy back a portion of the equity loan percentage without repaying it all at once. Key points:

• You typically need to repay in minimum increments of 10% of the current property value (rules can vary slightly by scheme administrator, so check your specific mortgage/loan documentation).
• A formal RICS valuation is required each time you staircase, to establish the current market value the repayment is calculated against.
• Staircasing reduces your outstanding equity loan percentage (e.g. from 20% down to 10%), which correspondingly reduces future interest charges once you're past the interest-free period.

Full repayment: selling or remortgaging

The equity loan must be repaid in full:

1. On sale of the property — repayment (based on the percentage share of the sale price) happens as part of the completion process, alongside your main mortgage redemption.
2. At the end of the loan term — typically 25 years from when the loan started, if you haven't sold or otherwise repaid before then.
3. Voluntarily, at any time, through remortgaging or using savings — many borrowers choose to repay before interest charges begin, or shortly after, to avoid the compounding RPI-linked interest.

Remortgaging to repay Help to Buy

A common strategy is to remortgage onto a larger standard mortgage that includes enough extra borrowing to repay the equity loan outright. This requires:

• A current valuation of the property to establish how much the equity loan repayment will cost.
• Sufficient equity and income to support the larger mortgage under normal affordability rules.
• Comparison of the cost of increased mortgage borrowing against the cost of continuing to pay rising equity loan interest — for many borrowers, especially once RPI-linked interest has been rising for a few years, remortgaging becomes the cheaper long-term option.

Practical steps if you have a Help to Buy loan

1. Know your exact anniversary date — the interest-free period is calculated from your original completion date, not the calendar year.
2. Get a valuation well before you plan to repay or staircase, so you know roughly what you'll owe.
3. Model both options — remortgaging to repay in full, versus staircasing gradually, versus letting the RPI-linked interest continue — using up-to-date mortgage rates and your own numbers.
4. Speak to a mortgage broker experienced with Help to Buy, as the affordability assessment and product options for remortgaging to repay an equity loan have some specific quirks compared to a standard remortgage.

Summary

The two features that catch Help to Buy borrowers out are the year 6 interest cliff-edge and the fact that repayment is calculated on your home's current value, not your original loan amount. Understanding both well before your interest-free period ends gives you the best chance of choosing the most cost-effective repayment route — whether that's staircasing, full remortgage repayment, or repaying on sale.