The Help to Buy London scheme is launching today, with lenders competing for a wave of new business.
The Government is offering buyers of new build properties equity loans of up to 40% of the purchase price. The borrower will need a 5% deposit and a mortgage. The scheme applies to properties worth up to £600,000 in London.
Help to Buy London Launches Today
Nationwide and Leeds building societies are some of the first to launch products for the scheme, while Barclays has introduced new rates.
Borrowers can get a two-year fixed rate deal at 1.55% with a £999 fee, or 1.85% with no fee from Barclays.
For longer-term borrowers, the bank is offering a five-year fixed rate of 2.19% with a £999 fee, of 2.49% for a fee-free deal.
These are currently the lowest rates available for Help to Buy London.
Today, Leeds is launching a two-year fix at 1.79% with a £799 fee and a five-year fix at 2.45% with a £199 fee.
Nationwide has updated its shared equity products, which include Help to Buy London and the wider equity loan schemes.
It has a two-year fix at 1.89% with a £999 fee, or 2.29% with no fee at 60% loan-to-value (LTV).
For a 75% LTV loan, Nationwide has a two-year fix at 1.99% with a £999 fee, or 2.39% with no fee.
It is also offering five-year fixed rate deals up to 60% LTV, one at 2.64% with a £999 fee, or a fee-free deal at 2.84%.
At 75% LTV, rates start at 2.74% with a £999 fee, or 2.94% with no fee.
Those applying for a mortgage with Nationwide can receive a fee-free standard valuation, plus £250 cashback if they have a Nationwide Flex main current account.
Help to Buy London is an extension of the Help to Buy: Equity Loan scheme, launched in 2013.
The Government is hoping to boost homeownership levels by providing financial support to enhance a buyer’s deposit.
Outside of the capital, borrowers can top up their 5% deposit with an equity loan of up to 20%, meaning they can effectively put down a 25% deposit.
However, for those in London, where the average house price is £506,724, a 5% deposit is still a huge £25,336.
Homebuyers can also take advantage of Government-backed schemes such as Help to Buy: Mortgage Guarantee and the Help to Buy: ISA.