The Government Help to Buy scheme is an equity loan, which helps you to cover up to 40% of the cost of your new home. You will need a minimum 5% deposit and a 55% mortgage to make up the rest.
You must already have a mortgage for this scheme to work, as the equity loan can only be a second charge. The equity loan is for a maximum of 25 years, or before, if the property is sold or the mortgage is redeemed, whichever term is the shorter of the two.
The 40% loan will not collect interest for the first five years of you owning your home. You will, however, need to pay a management fee of £1 a month from the date of purchase. From year six, a fee of 1.75% is payable on the equity loan, which rises annually by RPI (Retail Price Index) inflation plus 1%.