Apply for a Help to Build: Equity Loan
How to repay the loan
You do not have to pay off any of the loan until the loan ends.
The loan can end if any of the following happen:
- the term of the loan is over (this is usually 25 years)
- you sell the home
- you finish paying off your mortgage
- you break the terms of the loan contract (if this happens, Homes England can order you to repay the loan in full)
You can choose to pay off part of the loan at any time to reduce the final amount you’ll owe.
You will have to pay fees and interest. These do not count towards paying back the equity loan.
Paying off all or part of the loan
You can make a full or part repayment at any time during the term of the loan.
Any repayment you make must be worth at least 10% of the market value of the home and the land at the time you make it.
You cannot make a repayment that reduces the amount you owe below 5% of the market value. This is because your final payment must be at least 5% of the market value.
For each repayment, you need to:
- hire a RICS (Royal Institution of Chartered Surveyors) surveyor to get the property valued
- pay a fee to the equity loan administrator - the amount varies depending on when you make the repayment
Find a RICS chartered surveyor (RICS website).
As the market value of your home increases or decreases, so does the amount you have to repay on your equity loan.
How much you pay when the loan ends
The final amount you must repay is based on:
- the market value of the home and the land at the time of the final payment
- how many one-off payments you made
If you owned the land before building on it, the final amount you pay will still be based on the value of both the home and the land.
The equity loan administrator will tell you how much you need to pay when you’ve sent them the surveyor’s valuation.
If you sell the home to pay off the loan, the amount you must repay will be based on either the market value or the sale price, whichever is higher.
You can read more about the Help to Build: Equity Loan, including examples that show how repayment works in more detail.