Shared equity mortgages (including Help to Buy Equity Loan)
The maximum LTV we will currently consider lending on shared equity properties is 90% based on the full market value of the property, however the maximum loan within these parameters will be 95% of the value of their equity share.
Please note that if the property is a new build then we will restrict the loan to a maximum of 85% for houses and bungalows, and 80% for flats and maisonettes, of the full market value of the property. Available against property in England, Wales & in Scotland using the Affordable New Build Scheme Scotland.
Full market value of property
Max percentage of clients’ equity share
New build houses and bungalows
New build flats and maisonettes
The following rules apply to shared equity properties:
- Equity loan repayment must be keyed to Mortgage Pro, using a 3% interest rate as a minimum (regardless of whether this is lower at the outset). Where the interest is higher at point of application, the higher percentage must be used.
- TSB must have first charge. The seller secures their interest by way of a second charge.
- We will consider lending up to 95% of the value of the share that is being purchased.
- The maximum equity share a builder or private company can retain is 25%.
- The customer must provide a minimum deposit of 5% of the full purchase price, by way of personal contribution (excluding any deposit provided by a builder or housing association).
- The mortgage must be on a repayment basis
- We do not allow any remortgage applications, where there is any element of debt consolidation.
- The default term for the equity loan is 25 years however normal criteria applies for the mortgage
Help to Buy Equity Loan
- Equity loan repayment must be keyed to Mortgage Pro, using a 3% interest rate as a minimum (regardless of whether or not this is lower at the outset). Where the interest is higher at point of application, the higher percentage must be used.
- Available to all customers purchasing a new build property
- UK, EEA and citizens who have a right to reside are eligible
- Part Exchange is not acceptable
- Property value and purchase price must be the same
- For mortgage applications completing from 1 April 2021:
- Help To Buy England and London mortgage applications are restricted to First Time Buyers
- Maximum value/purchase price is £250,000 in Wales and vary per region in England as per table below.
East of England
- It’s important that you check your customer’s personal criteria meets the new rules before you proceed with an application. TSB Mortgage Pro will not automatically decline an application until decision in principle stage (DIP).
- For more information, go to Help to Buy: Equity Loan - Own Your Home - Own Your Home
- Maximum value/purchase price £600,000 in England, £200,000 in Scotland, £300,000 in Wales (Reduced to £250,000 from 01/04/2021). Help to Buy: Equity Loan - Own Your Home
- Only available on capital repayment mortgages
- The customer must provide a minimum deposit of 5% of the purchase price, by way of personal contribution. The Government lend up to 20% of the property value (15% in Scotland, 40% in London) through an equity loan, which can be repaid at any time or on the sale of the home
- The maximum LTV for product selection is 85% for houses and bungalows, and 80% for flats and maisonettes, and is based on the mortgage amount against the total property value.