Help to Buy (Scotland) aims to assist 7,500 home buyers over the next three years
The revamped Help to Buy (Scotland) scheme launches today, providing interest-free equity loans to first-time buyers and home movers.
The scheme works slightly differently to its predecessor, which helped 7,000 home buyers between 2013-2015. Here's everything you need to know.
You'll need to have saved up a deposit of at least 5%, and your combined mortgage and deposit will need to cover at least 85% of the total price of your desired property.
Under the terms of the new scheme, the maximum price you can spend on a property changes each year.
If you buy a house before 31 March 2017, you can spend up to a total of £230,000. This limit then reduces to £200,000 until 31 March 2018, and then £175,000 until 31 March 2019, when the scheme will close.
The maximum price limit applies for the date that the transaction is completed, not the date the property is reserved.
Mortgages for Help to Buy (Scotland) are only available from participating lenders, and so far seven have signed up. These are:
Affordability for mortgages will be means-tested at the level of 3.5 times your joint annual income if you're buying with a partner, or 4.5 times your annual income if you're buying alone.
To use Help to Buy (Scotland), you'll need to follow these steps:
There's no set deadline for when you must repay your equity loan, and it's possible to purchase additional equity if you wish. This process is often referred to as 'tranching up'.
You can increase your share by a minimum of 5% in any one year, but bear in mind you'll be buying the 'chunk' of equity at market rate - so you'll need to get a valuation done before purchasing.
There are also some restrictions on how you can use a property bought using a Help to Buy (Scotland) equity loan.
Firstly, you'll need to be using the home as your main residence. This means you can't purchase the property as a buy-to-let investment, and part-exchange isn't available.
You will also need written permission to make any changes or improvements to the property while you're still paying back the government's share.