HomeBuy reforms benefit key-workers
by Gill Montia
The Open Market HomeBuy scheme, which aims to help key-workers get a foot on the housing ladder, is undergoing a major review.
The move is intended to increase the number of people taking advantage of the scheme, which has so far attracted only 2,000 key-workers.
From 1st April first-time buyers will be able to take out a mortgage for half the cost of their property at an initial interest rate of 1.75%.
They will then need to combine the loan, which is part-funded by Government, with a conventional mortgage from a bank or building society.
Under the existing rules, buyers need to secure a conventional mortgage to cover two-thirds of the cost of their home.
In practical terms, the change means that someone buying a house with a market value of £300,000 will be able to take out a standard mortgage for just £150,000.
They will pay interest on the HomeBuy loan at an initial 1.75%, but the rate will increase to come in line with the Retail Prices Index, plus one per cent (currently 5.1%).
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