Minimum home Equity Loan

In order to buy with FirstBuy, you need to save (at least 5% down payment on the stock you bought) and a home loan to reach at least 80% of the value of the house you want to buy. Most of the remaining cost of the house is covered by FirstBuy.

You do not have to make any payments for the first five years of FirstBuy home ownership. After five years you then make a charge to the National HomeBuy Agent of 1.75% per year for the loan due. Every year this charge is increased by RPI (Retail Price Index - the general indicator of inflation) plus 1%.

You can also make partial payments ("stairasing") on your FirstBuy equity loan at the prevailing fair value at the desired stairway after 12 month of owning it. Minimum incremental redemption is 10% of the entire fair value. Selling your home, you pay back FirstBuy from the corresponding portion of the sales revenue.

If, for example, your FirstBuy Equity loan was initially for 20% of the full fair value of your home and you had never descended; you would pay back 20% of the full fair value when it came to the sale. And who is entitled to FirstBuy? HomeBuy Direct allows you to buy a new home in a specific housing complex by means of an equity loan.

At least 70% of the full amount of the sale must be covered by your mortgages, your saving balance and any necessary deposits; the rest is covered by an equity loan of up to 30% of the full amount. There is no charge on the equity loan for the first five years of homeownership and a 1.75% charge on the equity loan from the sixth year - calculated on the basis of the fair value of the real estate at the date of acquisition and the remaining equity loan repayment rate.

In the sixth year, the equity loan charge increases by RPI (Retail Price Index) plus 1%. The HomeBuy Direct is a past achievement, but there are still a few HomeBuy direct evolutions that will be made available in London this year. Entitlement and prioritisation conditions are the same as for FirstBuy.

And if you've already purchased a home from HomeBuy Direct and want to move, pay back your loan or take out a mortgage, go to www.myfirsthome.org.uk, which can help and advice you on these after-sales deals and more.