Which statement best describes the Help to Buy Equity Loan?

Which statement best describes the Help to Buy Equity Loan?

• A. Government loan of up to 20% to fund a new build property of value up to £600,000; it must be the only property owned and occupied by the buyer.
• B. A government grant that reduces the purchase price.
• C. A loan available only for buy-to-let properties.
• D. A mortgage product with no government involvement.

Answer: (A)

The main idea being tested is how the Help to Buy Equity Loan works: it’s a government-backed loan that helps fund part of a newly built home. The correct description is that the government lends up to 20% of the property's value (up to a £600,000 cap) to help the buyer purchase a new build, with the condition that the property will be their only home and they will occupy it as their primary residence. It’s not a grant or a mortgage product with no government involvement; it’s an equity loan that sits alongside your mortgage and must be repaid when you sell the property or at the end of the loan term, with interest applying after an initial interest-free period. This contrasts with buy-to-let or non-government-backed financing, which is why the other statements don’t fit.

The main idea being tested is how the Help to Buy Equity Loan works: it’s a government-backed loan that helps fund part of a newly built home. The correct description is that the government lends up to 20% of the property's value (up to a £600,000 cap) to help the buyer purchase a new build, with the condition that the property will be their only home and they will occupy it as their primary residence. It’s not a grant or a mortgage product with no government involvement; it’s an equity loan that sits alongside your mortgage and must be repaid when you sell the property or at the end of the loan term, with interest applying after an initial interest-free period. This contrasts with buy-to-let or non-government-backed financing, which is why the other statements don’t fit.