Raise a substantial deposit for the home you really want

Put up just 5% and the seller tops it up with at least 15%, so you get more for your money and better interest rates on your mortgage

BenefitsHow it works

Buying your dream first home shouldn't be a fantasy and, while buying without support may no longer be possible for many, the support you get shouldn't limit you to a home you wouldn't otherwise want, in a location that impacts your lifestyle.

Homewards helps you buy the home you want, where you want. Don't compromise on location, taste or lifestyle. No long commutes or overpriced new builds with limited potential. Just a bigger deposit (topped-up by sellers wanting to keep some equity in the property), meaning a cheaper mortgage on homes you never had access to before.

Property listings

(NB: Example illustrations for the purposes of understanding the product. Not genuine property listings. Lender interest rates correct as of 12th Aug 2018.)

Belsize Park, London, NW3

£660,000

Deposit (30%+: £198k+)

Your  deposit:

5%+ (£33k+)

Seller deposit equity loan:

25% (£165k)
(15 yrs)

Interest rate on deposit equity loan:

3.8%
(5 yrs fixed)

Mortgage

Mortgage required:

70% LTV (£462k)
(income: £102k+)

Best 70% LTV mortgage rate:

1.94%
(5 yrs fixed)

Overall rate for comparison

Homewards weighted average interest rate:

2.31%
(5 yrs fixed)

Vs. best 95% LTV mortgage:

3.58%
(5 yrs fixed)
(income: £139k+)

Shad Thames, London, SE1

£720,000

Deposit (40%+: £288k+)

Your  deposit:

5%+ (£36k+)

Seller deposit equity loan:

35% (£252k)
(5 - 10 yrs)

Interest rate on deposit equity loan:

4%
(5 yrs fixed)

Mortgage

Mortgage required:

60% LTV (£432k)
(income: £96k+)

Best 60% LTV mortgage rate:

(5 yrs fixed)
1.74%

Overall rate for comparison

Homewards weighted average interest rate:

2.44%
(5 yrs fixed)

Vs. best 95% LTV mortgage:

3.58%
(5 yrs fixed)
(income: £152k+)

Battersea, London, SW11

£580,000

Deposit (20%+: £116k+)

Your  deposit:

5%+ (£29k+)

Seller deposit equity loan:

15% (£87k)
(5 yrs only)

Interest rate on deposit equity loan:

3%
(5 yrs fixed)

Mortgage

Mortgage required:

80% LTV (£464k)
(income: £103k+)

Best 80% LTV mortgage rate:

2.04%
(5 yrs fixed)

Overall rate for comparison

Homewards weighted average interest rate:

2.08%
(5 yrs fixed)

Vs. best 95% LTV mortgage:

3.58%
(5 yrs fixed)
(income: £122k+)
FAQs
Get started to find out more

Why buy with homewards?

A deposit top-up from sellers

You provide at least 5% and the seller will add at least 15%, as an equity loan for your deposit (meaning they share the risk and reward with you).

Get more for your money

A larger deposit means either a smaller mortgage with a cheaper interest rate (requiring a lower household income), or that you can afford a home of greater value.

Ex-rentals in prime location

Our sellers' properties used to be rentals in locations that ordinary buyers simply couldn't access before. Ex-rentals also mean there's no chain on the sale.

Homes with soul and character

Unlike the government's "Help to Buy" scheme, which only applies to mass-produced new builds, our sellers' are offering unique homes, of all ages.

Priced right and full of potential

Unlike new builds, our sellers' properties aren't over-priced to begin with, so, if house prices go up, they're likely to appreciate in value quicker. Since they're older and used to be rentals, many will have room for you to add value yourself.

A packaged homebuyer journey

We take the stress out of the process by finding your dream home first, adding financial support as a bolt-on and helping you get the best mortgage for your needs and circumstances.
Help to Buy: Equity Loan
A contribution to your homebuyer deposit
Greater affordability and/or access to cheaper borrowing
Greater levels of support (up to 40%) available anywhere
No building delays affecting your move in date
No restrictions on the specific areas you want to buy in
Access to a range of desirable homes of all ages
Fair market value on purchase, with the best growth potential
Room to add value to the property yourself
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How does it work?

In a nutshell, when you buy one of our sellers' homes, they give you at least 15% of the property value as an equity loan to top-up your deposit.
The overall interest rate will be much lower than if you took out a 95% LTV mortgage from a single commercial lender (which may not even be possible).
(Note: Homewards equity loan rate is illustrative. The actual rate may differ. Post Office 95% LTV mortgage rate correct as of 12th Aug 2018. All rates are based on 5 year fixed period.)
FAQs
As with all mortgages, the loan will be secured by a charge over the property. Failure to keep up with payments may lead to repossession of your home.
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FAQs

What's an "equity loan"?

A deposit support equity loan, otherwise known as a "shared equity loan", is when a third party provides you with financial support for your home purchase deposit (to increase your affordability by helping you need to borrow less, on a lower household income and at cheaper interest rates from the mortgage lender).

In return, the third party providing you with this support will have an equity stake in the property, proportionate to their investment, and will receive a reasonable monthly interest payment on the loan (akin to a relative rental payment, between 3-4%).

The loan will be "interest-only" throughout the loan term (meaning you only pay interest on the loan and won't need to repay capital until the end, unless a capital repayment plan has been agreed in advance between yourself and the support provider). The loan will be secured as a "second charge" on the property, behind the mortgage lender.

I have a question about this...

Who's providing me with this support and why?

The seller of each property will be providing their own buyer with the deposit support equity loan from their own capital in the property they're selling.

They're willing to do this because they are unique types of sellers, who are (often reluctantly) selling properties that aren't their primary residences. Therefore, they don't want or need to take their capital out of the properties they're selling and are excited to be able to partner with you to help increase your affordability and to still be able share in the upside of the property.

I have a question about this...

I'm renting and I think my landlord is/might consider selling

If your landlord is considering selling, and you know about it, or if they have already given you notice that they're putting it on the market, you may well want to refer them to us.

If they choose to use our service, provided you meet the eligibility criteria, you'll get the first right of refusal on the support and sale of the property (if you're interested in buying it from them in the first place).

On top of that, we'll provide you with a referral bonus for introducing them to us!

I have a question about this...

How is this different from the government's Help to Buy: Equity Loan?

Unlike the Help to Buy scheme, we do not limit you to new builds that are usually sold at a premium (and appreciate in value slower) and have little room for adding value yourself. We also provide you with more flexible support in terms of the percentage that sellers will contribute to your deposit and the term length.

While we do expect you to pay interest from the start, our rates are fixed for the duration of the loan (unlike H2B, which increases yearly after year 6).

Even though you pay interest on the support loan, the interest rate you pay on the total you borrow from the seller and your mortgage lender combined will be cheaper than a high LTV mortgage from one lender (see "Why wouldn't I get a standard 95% LTV mortgage?" and "What's a "weighted average interest rate"?" FAQs below)

I have a question about this...

Will mortgage lenders accept this sort of support (deposit support equity loan)?

Yes. However, not all lenders are willing to accept, what's effectively a loan on top of a loan, but many will, provided you can afford to have both the support loan and the mortgage (verified through affordability checks), you pass a credit check and the mortgage lender understands and accepts the terms of the loan (which we take care of).

We are working with a number of the top high-street banks and building societies who are willing to give you a mortgage on this basis, to ensure that you have a range of options to find the best possible mortgage to sit alongside the deposit support equity loan.

I have a question about this...

When and how will my credit score be assessed?

Your credit score will be checked when you apply for a mortgage (or mortgage in principle) from the mortgage lender.

This will be taken from data provided by credit reference agencies such as Experian or Equifax.

I have a question about this...

How is this different from a normal purchase, with a standard mortgage?

It's not, really. The only difference is that you are getting support with your deposit (from the seller themselves).

This will help you save money by borrowing less and get cheaper rates and/or to afford more.

I have a question about this...

Why wouldn’t I just get a standard 95% LTV mortgage?

If you choose to get a 95% LTV mortgage, you will pay much more in interest overall (on a relatively larger mortgage) and you will be able to afford less in the first place (as the amount you can borrow is typically capped at 4.5x your household income).

Even though you are paying interest on the deposit support equity loan (which may seem similar to the rate you'd pay on a 95% LTV mortgage), you will be paying less interest overall when the weighted average interest rate is calculated (see the next FAQ for more detail).

I have a question about this...

What's a "weighted average interest rate"?

This is the overall rate you'll be paying on the money you've borrowed (between the mortgage and the deposit support equity loan). It's used to compare the rate with if you had borrowed the same amount from one lender (e.g. the mortgage lender alone).

For example, if you provide a 5% deposit yourself, you'll be borrowing 95% of the property value from other sources. If you borrowed this all from a mortgage provider you'd be paying an interest rate of around 3.58% (the 5 year fixed rate we found as of 12th August 2018).

By borrowing 15%, for example, from our sellers (even at a 4% interest rate) and 80% from the mortgage provider (at 2.04%, the best 80% LTV, 5 year fixed rate we could find on 12th August 2018), the "weighted average interest rate" you'd be paying on 95% of the property value would be only 2.23%!

I have a question about this...

How much interest will I pay on the deposit equity loan? Will it go up if the base rate does?

Our sellers are more than happy to leave their capital in the properties they're selling to support your home purchase because they will be sharing in the success of the property in the future.

They are also looking for a fair return on the money they're leaving behind, so it's worth it for them, and they'd not be in a worse position than cashing it all out and reinvesting it elsewhere.

We believe that between 3-4% is fair in today's economic climate (the exact rate is still being determined). This is very similar to what they'd be getting if they were still letting the property and akin to a 95% LTV mortgage rate.

Our sellers will decide how long they want to provide you with the support loan (there's a minimum of 5 years), during which time the rate will be fixed. Therefore, if the Bank of England up the base rate, it will not affect how much you pay on the support loan.

I have a question about this...

What other costs are there?

We don't charge you fees, but, as with any home purchase, you will have to factor in additional set-up costs, including: Stamp Duty (although if this is your first home, you may be able to use the first-time buyer exemption up to the relevant threshold. You can find out from more from HMRC's website); solicitors' fees, surveyors' fees (if you choose to have a survey done), insurance, mortgage arrangement fees (if relevant), etc.

I have a question about this...

How much support is available?

Each seller will have varying amounts of equity remaining in their properties when they sell.

Depending on how much their remaining mortgage is worth, the money they wish to take out of the property and the eventual sale price, each seller will be able to offer a different amount of support. We require sellers to provide at least 15%.

Listings will show an estimate of how much that equity support could be and, when the final sale price is agreed, that amount will be finalised.

I have a question about this...

How long is the support available for?

As our sellers uniquely want to keep their money invested in these properties, support is flexible and usually available for longer periods.

The minimum term is 5 years (so you can have enough time to build equity in the house to make a return for yourself and the seller), but you'll see on each listing how long each seller is willing to support you for. This can also be flexible, where the seller might be willing to extend the support period at a later date.

I have a question about this...

Who can get Homewards' support?

Anyone can use Homewards, but we're focused on helping first-time buyers.

The only requirements are that you have the right to buy in the UK, have at least a 5% deposit of your own, have a good credit history and have enough disposable income to afford the mortgage and deposit equity loan payments.

The mortgage lender might have other criteria that they will discuss with you upon application.

I have a question about this...

Where's Homewards' support available?

For the time being, Homewards will be focusing on London (and then the South East of England). Eventually, we'll be providing support across the UK.

I have a question about this...

Are there any restrictions on the properties that can be purchased with the support?

Since each of the homes you'll find on our platform come with the seller's support, you won't have to worry about finding homes that can be purchased using our product. You'll only be able to use our product on the homes we list (for now).

The only restrictions are that the purchase must be for your primary residence, with a residential mortgage (i.e. not a Buy-to-Let mortgage for a rental property, etc.)

I have a question about this...

Are Homewards or the seller also owners or added to the title deed?

No. Once the home is purchased, it's yours.

However, the seller will have a "second charge" registered with the Land Registry to safe guard their investment.

I have a question about this...

How does Homewards make money?

We don't charge buyers any fees. We make money from the lenders we introduce you to for your mortgage and from the sellers for helping them to sell their houses and for providing you with the deposit equity loan support.

I have a question about this...

Is Homewards regulated?

We are working on getting the relevant FCA permissions to be able to provide you and our sellers with our product.

We will only be able to provide you with that product once we have those relevant permission (that's why we're "Coming Soon").

I have a question about this...

Who needs to pay the mortgage, maintenance, repairs, taxes, insurance, etc.?

You are the sole owner of the house, so this will be your responsibility alone.

I have a question about this...

What if I can't keep-up with repaying the interest on the deposit support equity loan?

It's your responsibility to ensure that you can make these payments and we'll do up front due diligence to make sure you're likely to be able to do so, comfortably.

However, circumstances can changes, and in that case, we'll be happy to work out a solution between yourself and the seller who's providing you with the support.

I have a question about this...

Can I sell at any time?

Yes. However, if you choose to sell during the term of the deposit support, we have the right of first refusal on the properties.

This just means that we have the right to re-market the property to other buyers like you, for a set timeframe, before you can put it on the open market.

We do this so we can give sellers a chance to let their investment grow and so we can offer these houses to first-time buyers who need help with their affordability.

I have a question about this...

What if Homewards goes bankrupt?

If, for any reason, we cease to operate as a company during the term of your support, we will ensure that there is a third party available to carry out any remaining administrative duties between yourself and the seller.

Apart from that, it will not make a difference to your situation.

I have a question about this...

When do I have to repay the deposit support equity loan?

This will depend on how long the seller has provided you with the support loan for.

The minimum term is 5 years, but some sellers will offer support for longer.

Sellers may be keen to extend the term of the support, at a later date, and, if you wish to request an extension, we will be able liaise with the seller on your behalf.

I have a question about this...

How much will I have to repay?

The value of the deposit support equity loan repayment will depend on the price of the house when you sell. This is because the support provided to you by the seller is in the form of equity in the house.

This means that if the house price has gone up by 10%, you will pay back the original loan value, plus 10%.

If the house falls modestly, and you have equity in the house, that equity will be used to repay the seller who's supporting you.

If the house price falls dramatically, and your outstanding mortgage and initial equity contribution are worth the same or more than the value of the house, then the seller will share in the losses with you. In this instance, you will not be required to repay the support loan yourself.

I have a question about this...

How will I be able to pay back the loan, even after 5 years?

You will be able to repay the loan with your own savings, by remortgaging or selling the property.

I have a question about this...

Can I sell on the open market myself?

As long as the loan term is up, of course. If you choose to sell before the minimum 5 year period, we have the right of first refusal.

This just means that we have the right to re-market the property to other buyers like you, for a set timeframe, before you can put it on the open market.

We do this so we can give sellers a chance to let their investment grow and so we can offer these houses to first-time buyers who need help with their affordability.

I have a question about this...

How do you calculate how much the house is worth when I sell?

If we are helping you sell the house to another Homewards buyer, we'll have a chartered surveyor carry out a valuation on the property at the time of sale.

I have a question about this...
I have a question not in the FAQs