The Help to Buy Equity Loan scheme closed to new applicants in October 2022, but hundreds of thousands of homeowners across England are still living with the loan on their title — and many are approaching or have already passed the five-year interest-free window. If that's you, understanding exactly how repayment works is urgent: the charges that begin in year six are permanent, they compound annually, and the amount you owe is tied to your property's current value, not what you originally borrowed.
This guide explains the mechanics, the three repayment routes, the costs involved, and the precise process you need to follow.
How the Help to Buy Equity Loan Actually Works
This is the point most borrowers misunderstand: the government owns a percentage of your property, not a fixed pound amount.
If you bought a £200,000 home with a 20% equity loan (40% equity loan in London), the government's stake is 20% of whatever your home is now worth. If your property has risen to £280,000, you owe £56,000 — not the original £40,000. Conversely, if prices have fallen, you owe less.
The equity loan was administered by Homes England (formerly the Homes and Communities Agency). Day-to-day administration was handled by Target HCA, which remains the servicer for existing loans.
The Interest-Free Window and Fee Schedule
| Period | Fee |
|---|---|
| Years 1–5 | No interest or management fee |
| Year 6 | 1.75% of the outstanding equity loan value per year |
| Year 7 onwards | Previous year's fee × (RPI + 1%) |
The management fee is not fixed — it rises with the Retail Price Index every year from year seven onward. On a £40,000 loan, the year-six fee is £700/year. If RPI is 3%, the year-seven fee rises to approximately £721, and so on. Over a decade, this becomes material.
Important: The fee is calculated on the current equity loan value (i.e., the percentage of current property value), not the original loan amount.
Three Repayment Scenarios
1. Staircase to 100% (Partial or Full Repayment)
You can repay in minimum 10% tranches of the current market value at any time. So if your home is worth £280,000 and you hold a 20% equity loan (currently worth £56,000), a 10% tranche repayment means paying £28,000 to reduce the government's stake to 10%.
This is useful if you want to reduce the annual fee without fully repaying.
2. Full Repayment on Sale
When you sell, the government receives its percentage of the sale proceeds automatically as part of the conveyancing process. This is handled through the legal completion. You do not receive the full proceeds — your solicitor is required to repay the equity loan from the sale price first.
3. Remortgage to Repay
Many borrowers remortgage at year five and use equity released from the property to repay the loan. This typically requires a sufficient loan-to-value ratio on the new mortgage. Note that lenders treat the equity loan as debt — it affects your available equity and therefore your LTV-tiered mortgage rate.
If you are planning to sell rather than remortgage — and the property is a leasehold flat — there are additional checks to make before completing the sale. The complete pre-purchase checklist for buying a leasehold flat covers the issues any buyer's solicitor will raise, including s.20 pending notices and EWS1 certificates.
The RICS-Approved Valuation Requirement
You cannot repay using your own estimate. Target HCA requires a RICS-approved valuation for any partial or full repayment outside of a sale transaction. The valuation:
- Must be carried out by a RICS-registered surveyor
- Must be on Target HCA's approved valuer panel (check at helptobuy.gov.uk)
- Is valid for three months from the date of the valuation
- Must not be an online automated valuation model (AVM)
If you use a valuer not on the panel, Target HCA will reject the application.
The Target HCA Repayment Process (Step by Step)
- Log in to the Target HCA portal (or call 0300 100 0021) and submit a repayment application.
- Receive authority to obtain a valuation — Target will confirm receipt and issue instructions.
- Commission a RICS panel valuation — allow 1–2 weeks for appointment and report.
- Submit the valuation report to Target HCA for approval.
- Instruct a solicitor — a conveyancer is required to handle the legal discharge of the equity loan charge on the title.
- Legal completion — the solicitor submits the funds to Target HCA and obtains a DS1 form (discharge of mortgage) to remove the charge from the Land Registry title.
Full Fees Table
| Fee | Typical Cost |
|---|---|
| Target HCA administration fee | £200 |
| RICS panel valuation | £250–£500 |
| Solicitor / conveyancer fees | £500–£1,500 |
| Land Registry fee (DS1 registration) | £20–£45 |
| Total estimated cost | £970–£2,245 |
These costs apply on top of the loan repayment itself and are payable regardless of the amount being repaid.
The Critical Rule: Value Rises Mean You Owe More
Because the loan is percentage-based, house price inflation works against you. A borrower who took a 20% equity loan on a £200,000 property in 2016 would have owed £40,000 at completion. If that property is now worth £320,000, the repayment amount is £64,000 — a £24,000 increase despite never having borrowed a penny more.
This is why financial advisers consistently recommend repaying the equity loan as early as possible if you have the equity to do so, ideally before significant price appreciation.
Timeline
A typical repayment takes 10–14 weeks from application to completion:
| Stage | Estimated Duration |
|---|---|
| Application submission to valuation authority | 1–2 weeks |
| RICS valuation arranged and completed | 1–2 weeks |
| Target HCA approves valuation | 1–2 weeks |
| Solicitor instructed and legal work completed | 4–6 weeks |
| Land Registry discharge registered | 2–4 weeks |
Do not assume this is a quick process — start at least three months before your year-five anniversary if you intend to avoid year-six fees.
Navigate Your Repayment With a Clear Plan
Repaying a Help to Buy equity loan involves more moving parts than most homeowners expect. If you also hold a Help to Buy ISA or Lifetime ISA, see our guide to Help to Buy ISA and Lifetime ISA mechanics — including how the LISA's 12-month rule and property price cap interact with your equity loan position. For a guide to what replaced Help to Buy for new buyers, including First Homes, the Mortgage Guarantee Scheme, and how shared ownership works now, see our Help to Buy alternatives and shared ownership guide. Renovate Me helps you think through the full financial picture of your property — whether that's equity loan repayment, renovation budgeting, or planning your next move. Start building your personalised property plan at renovate-me.madethis.app.