Which of the following is a government-backed home ownership scheme?

Which of the following is a government-backed home ownership scheme?

• A. Deferred interest mortgage
• B. Help to Buy Equity Loan scheme
• C. Rent to Buy scheme
• D. Shared ownership

Answer: (B)

The concept being tested is recognizing which scheme is funded or guaranteed by the government to help people buy a home. The Help to Buy Equity Loan scheme is the government-backed option here. In this arrangement, the government provides an equity loan to part-fund the purchase, reducing how much you need to borrow from a mortgage lender and helping with the deposit. You still own the home and pay back the equity loan later, typically when you sell or remortgage, with the repayment reflecting the current value of the share you own. This setup is designed to share the risk with the buyer and make buying a newly built home more affordable. The other options involve private lending or different ownership models rather than a government-backed equity loan. A deferred interest mortgage is a private product where interest accrues and is paid later; Rent to Buy is a rental-to-purchase arrangement not funded by a government equity loan; and shared ownership involves buying a share of the property with a housing association and paying rent on the remaining share, rather than a government-backed loan toward the purchase.

The concept being tested is recognizing which scheme is funded or guaranteed by the government to help people buy a home. The Help to Buy Equity Loan scheme is the government-backed option here. In this arrangement, the government provides an equity loan to part-fund the purchase, reducing how much you need to borrow from a mortgage lender and helping with the deposit. You still own the home and pay back the equity loan later, typically when you sell or remortgage, with the repayment reflecting the current value of the share you own. This setup is designed to share the risk with the buyer and make buying a newly built home more affordable.

The other options involve private lending or different ownership models rather than a government-backed equity loan. A deferred interest mortgage is a private product where interest accrues and is paid later; Rent to Buy is a rental-to-purchase arrangement not funded by a government equity loan; and shared ownership involves buying a share of the property with a housing association and paying rent on the remaining share, rather than a government-backed loan toward the purchase.