Homebuy Direct offers equity loans to people who want to buy a new-build home on selected developments across the country, although availability is limited.
As part of the deal, you buy a minimum of 70% of the value of the property. An equity loan of up to 30% is then provided to help complete your purchase, but there are no payments on the loan for the first 5 years. After that, there's a 1.75% fee that increases annually with inflation. You need to raise a mortgage to buy through this scheme.
You can buy additional shares until you own 100% of the property, calculated on the current market value at the time you buy those shares.
There are other types of shared equity mortgages deals around. For example,
there's one specifically for Londoners. There's also the FirstBuy scheme.
Funded by an affordable mortgage and with help from a Homebuy Agency and house builders, this also gives you the chance to buy a new home with an equity loan of up to 20%. The maximum full purchase price is £280,000.
Like HomeBuy Direct, the FirstBuy equity loan is interest free for the first 5 years. Then there's a fee of 1.75% per annum on the outstanding loan. This rises annually by inflation plus 1%.
To use FirstBuy, you will need a 5% deposit on the share you're buying and a mortgage that covers 80% of the value of the property.
For more details on shared equity mortgage deals, see the see the FirstBuy site .