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If you have an English Help to Buy: Equity Loan and sell your home, you normally repay the loan in full from the sale proceeds. The principal is a percentage of your home’s current value—not simply the cash amount you originally borrowed—and Homes England calculates a sale repayment using the higher of a compliant RICS valuation or the agreed sale price. Interest, fees and any arrears are additional.
England’s scheme is closed to new applicants, but existing borrowers still need to follow the repayment process. Wales has a separate scheme route; the English rules below should not be assumed to apply there.
How much do you repay when you sell?
Your equity loan represents a percentage share of the home. On a full repayment when selling, Homes England uses the higher of the compliant RICS valuation and the agreed sale price, then applies your outstanding loan percentage. The original amount borrowed is not a fixed payoff figure.
For example, GOV.UK gives the example of a home bought for £200,000 with a 20% loan: the initial loan is £40,000. If the home is worth £250,000 when it is repaid, 20% of that value is £50,000 in principal, before interest, fees or arrears. If value has fallen, the percentage share may mean a lower principal repayment, subject to the sale-price-versus-valuation rule. GOV.UK: Help to Buy: Equity Loan
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What is included in the final amount?
The redemption figure can include the principal repayment, outstanding interest, the monthly management fee, administration charges and arrears. Valuation, conveyancing and mortgage-related costs may also apply. These charges are separate from principal: paying interest or fees does not reduce the equity-loan balance.
When do interest and fees apply?
No interest is payable for the first five years. Interest begins on the fifth anniversary, at the start of year six, at 1.75% of the original amount borrowed. The monthly amount is the annual interest divided by 12. GOV.UK’s illustration for a £40,000 loan is £700 a year, or £58.33 a month, at that initial rate. Interest payments do not repay principal. GOV.UK: Help to Buy: Equity Loan
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After the initial rate, the annual increase depends on when the loan was issued: loans from 2013–2021 use RPI plus 1%, while loans from 2021–2023 use CPI plus 2%. Increases are applied annually in April. Check your own loan documents and latest Homes England statement for your actual rate and amount; the scheme generation matters.
A £1 monthly management fee is payable until the loan is fully repaid. Homes England’s sale guidance also states a £200 administration fee when applying to repay. The valuation, conveyancer and any mortgage work can bring additional costs. The £200 figure and procedural details below come from guidance last updated 23 November 2023, so check current instructions before acting. Homes England: How to repay your equity loan when you sell your home
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How to repay the loan when selling
- Arrange a compliant valuation. Once you have an offer or the sale is close to confirmation, instruct a RICS-qualified and registered surveyor. The Homes England guidance says the surveyor must be independent of an estate agent and not related to or known by you. The report must include an internal inspection, comparable properties and market commentary. Its stated validity is three months, and it must be sent within five working days of issue.
- Instruct a conveyancer. They handle the legal process and coordinate repayment and discharge of Homes England’s charge.
- Submit the repayment application and sale documents. Provide the valuation, your conveyancer’s contact details and authority, and the memorandum of sale.
- Pay the administration fee and address arrears. The guidance states a £200 fee. Clear outstanding payments or agree a payment plan where permitted. Continue paying any monthly interest and the management fee until repayment is complete.
- Wait for the redemption letter. Homes England reviews the documents and issues an estimate of the amount due. The sale repayment is based on the higher of the valuation or sale price, with applicable interest, fees and arrears included.
- Have your conveyancer provide the undertaking and arrange funds. If completion is delayed by more than a week from the undertaking date, updated paperwork and figures may be needed. If the sale proceeds do not cover the amount due, you must provide the shortfall.
- Complete the sale and charge discharge. Once Homes England has processed the funds and completion documents, it applies to remove its charge at the Land Registry.
Timing and paperwork are consequential: the valuation validity, submission window and undertaking timing above are those stated in the Homes England guidance last updated 23 November 2023, and administrative requirements can change.
Can you repay only part of the loan?
Yes. A partial repayment can be made at any time, but it is calculated against the home’s current market value rather than the original purchase price. The GOV.UK overview states that the minimum partial repayment is 10% of current market value; the accessible repayment guide says at least 5% of market value must remain outstanding after a part payment. Confirm the applicable calculation and requirements with Homes England before arranging funds. GOV.UK: Help to Buy: Equity Loan · Homes England repayment guidance
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A part repayment reduces the outstanding percentage and therefore affects later principal and interest calculations. It is not a monthly principal-payment plan.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When must the loan be repaid in full?
For English borrowers, full repayment is generally required when you sell, at the end of the loan term (normally 25 years), or if you pay off the first-charge repayment mortgage without replacing it. Other breaches of the loan conditions may also trigger repayment. Check your agreement for the terms that apply to your account. GOV.UK: Help to Buy: Equity Loan
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Should you repay part before selling or wait?
There is no universally better choice. A partial repayment now changes the share still owed, while waiting leaves the full percentage exposed to the home’s value when repayment is due. Compare these factors before deciding:
- Current market value and likely sale price, including the possibility that either could change.
- Your remaining equity-loan percentage and the scheme-generation interest escalation that applies to your loan.
- The timing and cost of valuation, administration and legal work.
- Whether repayment funds are available without taking on additional borrowing, and how any new mortgage would affect affordability and terms.
GOV.UK advises seeking independent financial advice if considering borrowing more on a mortgage to repay the equity loan or continuing to pay interest. GOV.UK: How to repay your Help to Buy equity loan
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