If you're struggling to buy the home you love, try a private equity loan. Read our guide to how private equity loans work.
An equity loan works by topping up a buyer’s deposit with a second charge mortgage secured against the home. An equity loan acts in a very similar way to the Government’s Help to Buy scheme. The equity loan provider provides additional capital to the buyer, so they can increase their down payment on the property, and in return they take a stake in the buyer’s property. This means the lender will share in any future profit or loss made on the home.
Kirsty White
Mortgage lead
Each lender has their own eligibility criteria and rules on how the buyer pays the loan back, but some key principles apply.
Pros
Get on the ladder without family support
Boost your budget by up to £100,000
Have flexible repayment options, with the ability to pay back the equity loan in one chunk or in monthly instalments
Cons
In return for providing additional capital to the buyer, the lender takes a stake in the buyer's home. This means the lender will share in any future profit or loss made on the home
Interest rates start from 6.99%
The buyer must have a 5% deposit and a household income of at least £35,000
The buyer must:
Each lender has their own eligibility criteria and rules on how the loan is payed back, so our advisors will help you decide on what's the best option for you, but key principles apply. There are interest only options which reduce monthly payments, but give the lender a larger "stake" in your home. When an interest rate does apply, rates start from 6.99%.
Jamie used a private equity loan to buy his first home in St Albans
Living out of one room with a toddler, Jamie used a private equity loan so he could leave the family home, and buy his first place.
Make a plan and we'll give you a personalised recommendation.
Discover what you could afford with a private equity loan.