Help to Buy equity loan calculator, 2026/27

How the Help to Buy equity loan actually works

Under the scheme, the government lent a percentage of a new-build property's purchase price, typically 20% outside London and 40% inside London, on top of a mortgage and deposit covering the rest. Unlike a normal loan, the amount you owe is not fixed in pounds; it is fixed as a percentage of your home's value, recalculated whenever you repay part or all of it, or when you sell.

This means if your home rises in value, the amount needed to clear the equity loan rises with it, even though you never borrowed a penny more. Equally, if values fall, the amount owed falls too. Many buyers are surprised by this when they come to sell or remortgage years after completion.

How this is calculated

This calculator multiplies your current property valuation by the fixed percentage you originally borrowed to estimate today's repayment figure. For the first five years the loan is interest-free, after which most agreements charge interest starting around 1.75% of the loan amount, rising annually broadly in line with inflation plus a margin set out in your mortgage offer, so the rate and uplift formula you actually have should be checked against your own paperwork.

The monthly management fee charged by the Help to Buy agent in the interest-free years, and the annual increase formula after year five, both vary by cohort and region, so treat the interest figures here as an illustration rather than your exact statement.

Repaying or staircasing the loan

You can repay the equity loan in part (known as staircasing, usually in minimum 10% chunks) or in full, at any time, based on a RICS valuation at the time of repayment, not your original purchase price. Repaying earlier, before values rise further, can therefore be cheaper in absolute terms even though the percentage owed stays the same.

If you are selling the property, the equity loan is normally repaid automatically from the sale proceeds as part of the conveyancing process, using the actual sale price rather than a separate valuation.

Does the amount I owe on my Help to Buy loan increase over time?

The percentage you owe stays the same, but the pound amount changes with your property's value. If your home has gone up in value since you bought it, the amount needed to repay the loan will have gone up too, even though you have not borrowed anything extra.

When does interest start on a Help to Buy equity loan?

The first five years after completion are interest-free, though a small monthly management fee may apply. From year six, interest is charged on the loan amount at a rate set out in your original mortgage offer, then increased annually thereafter.

Can I pay off part of my equity loan?

Yes, this is called staircasing. You can usually repay in minimum 10% instalments, based on an up-to-date RICS valuation at the time, rather than your original purchase price, and you will need to use a Help to Buy agent-approved process.

What happens to the equity loan when I sell my home?

The loan is normally repaid from the sale proceeds during conveyancing, calculated as the agreed loan percentage of the actual sale price, so any increase or decrease in value directly affects how much the government receives back.