Understanding interest payments - Help to Buy: Equity Loan (2021-2023)

No interest is charged on your equity loan for the first 5 years.

You start to pay interest from year 6, on the 5th anniversary of taking out your equity loan.

In year 6, you pay interest of 1.75% of your equity loan amount.

Your interest rate rises each year in April by the Consumer Prices Index, also called CPI, plus 2%.

We use the CPI rate from September the previous year to work out the new rate of interest.

Your monthly interest payments are worked out like this:

Equity loan amount, times your interest rate, divided by 12 months.

We work out your interest payments based on the amount of equity loan you have left to repay.

Interest payments do not go towards repaying your equity loan.

You continue to pay interest until you repay your equity loan in full.

Find out more at:
Gov.uk/equity-loan-homebuyer.

Eligibility criteria and terms and conditions apply.