Help to Buy Equity Loan Calculator
This equity loan calculator shows what you owe on a Help to Buy equity loan and its interest fees: the loan is repaid as the same percentage of today’s value, so a 20% loan on a home now worth £230,000 costs £46,000 to repay. Interest starts in year 6 at 1.75% of the original loan and rises every April.
- Interest years 1 – 5none
- Year 6 rate1.75% of original loan
- Yearly riseCPI + 2% (RPI + 1% pre-2021)
Updated November 2026 · Uses GOV.UK Help to Buy interest rules
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How the Help to Buy equity loan is repaid
You repay the same percentage of the home’s market value as you borrowed, not the original cash amount. Borrow 20% of £200,000 (£40,000) and you repay 20% of the value when you sell, reach the end of your mortgage term or choose to repay: £46,000 if the home is worth £230,000, or £36,000 if it has fallen to £180,000. You can also make part repayments of at least 10% of the market value.
Help to Buy interest: year 6 onwards
There is no interest for the first five years. In year 6 you pay 1.75% of the original loan a year, in monthly instalments. On a £40,000 loan that is £700 a year (£58.33 a month). Each April the rate rises: by CPI plus 2% on the 2021 to 2023 scheme, or by RPI plus 1% on the 2013 to 2021 scheme. The rise applies to the rate itself, so with CPI at 3% the 1.75% becomes about 1.84%.
| Year | Rate (CPI 3% + 2%) | Interest on £40,000 loan |
|---|---|---|
| 6 | 1.75% | £700 a year |
| 7 | 1.838% | £735 a year |
| 8 | 1.929% | £772 a year |
| 10 | 2.127% | £851 a year |
The interest does not reduce the loan. There is also a £1 monthly management fee.
Should I repay my Help to Buy equity loan?
- Repaying stops interest, which rises every year, and removes exposure to future price growth on the loan share.
- If prices are falling, waiting could make the loan cheaper to clear, but interest keeps adding up.
- Many owners remortgage after five years to repay the loan; your LTV with a bigger mortgage decides the rate.
- You need a RICS valuation (valid for 3 months) and must pay admin fees to the scheme administrator.
Frequently asked questions
How much interest do I pay on a Help to Buy equity loan?
Nothing for five years, then 1.75% of the original loan in year 6, rising each April by CPI plus 2% (or RPI plus 1% on the older scheme).
Do I pay back the same amount I borrowed with Help to Buy?
No. You repay the same percentage of the current market value, so if the home has gone up you repay more, and if it has fallen you repay less.
How much is Help to Buy interest on a £40,000 loan?
£700 a year (£58.33 a month) in year 6, rising each year after that.
Does Help to Buy interest reduce the loan?
No. Interest payments do not reduce the amount you owe; only repayments do.
Sources and method
We use official UK guidance and recognised formulas, and test each calculator against worked examples. Results are estimates to help you plan, not professional advice. See how we work.