Help to Buy Equity Loan When My Partner Dies

The hard fact first: your Help to Buy equity loan does not die with your partner. If he dies and you were never married, the government's share of your home does not quietly disappear, is not written off out of sympathy, and does not stop being owed. It stays exactly where it was — a second charge on the property — and at some point it has to be repaid, usually when the home is sold or the main mortgage is cleared. That is the part couples who bought this way rarely realise until it matters.

Two things make it harder for an unmarried couple in particular. The first is that the amount owed is not the sum originally borrowed — it is a percentage of what the home is worth now, so on a house that has risen in value you owe more than you were lent. The second is that if you are not on the title, you have no automatic right to stay in the home at all, whatever you contributed to it. The equity loan and your lack of ownership can arrive as problems in the same week.

This page explains how the equity loan behaves on death, why an ordinary mortgage life policy usually leaves it unpaid, and what a cohabiting partner needs to have in place to keep the home rather than lose it to a debt nobody planned for.

The short answer: the loan does not die with him

Under the Help to Buy: Equity Loan scheme in England, the government — through Homes England — lent buyers a share of the purchase price of a new-build home, up to 20% outside London and up to 40% within it. That money was never a gift. It is a loan, secured by a legal charge on the property that sits behind your main mortgage, and death does not cancel it any more than death cancels the mortgage itself.

When a borrower dies, the loan becomes a debt to be settled as part of dealing with the property. It does not have to be repaid the instant someone dies — there is no demand for the cash the following morning — but it is triggered by the events that usually follow: selling the home, redeeming or remortgaging the main mortgage, or reaching the end of the loan's term. Whoever ends up owning the property inherits the obligation to deal with the equity loan, and Homes England deals with them.

How the equity loan actually works

The mechanics matter here, because they are the source of the nasty surprise. You do not repay a fixed number of pounds. You repay the same percentage of the property that you originally borrowed, calculated on the home's market value at the point of repayment. Borrow 20% of the price, and you owe 20% of whatever the house is worth when you come to settle — which is not what you were lent if the house has changed in value.

The loan was interest-free for the first five years. After that a monthly interest fee begins and rises every year thereafter, and a small monthly management fee applies for the life of the loan. Those fees are a cost of holding the loan, but they do not reduce the capital percentage you eventually have to repay — that is settled separately, against the property's value, when the loan is redeemed.

Source: gov.uk, Help to Buy: Equity Loan (2021 to 2023) — buyer's guide and scheme repayment guidance.

You can repay the loan early, in part or in full — a process called "staircasing" — and doing so before house prices rise further can save money. But after a death, when income has dropped and everything is uncertain, finding a lump sum to redeem it is rarely realistic. The wider version of how this debt grows over time is set out in Help to Buy: the equity loan that grows with the house.

The trap: it grows with the house

Put the percentage rule next to the way house prices move, and the problem becomes clear. If the home has gone up in value since you bought — which, over the years most of these loans have been running, is the common experience — the amount you must repay has gone up in lockstep. The government's 20% is now 20% of a bigger number. You benefit from the rise on your own share; you also owe more on theirs.

The scale of that movement is not something to guess at. HM Land Registry publishes the official record of what property is worth across England, and it is the figure the repayment is ultimately measured against.

Source: HM Land Registry, UK House Price Index, published under the Open Government Licence v3.0.

This is exactly where a standard mortgage life policy lets a cohabiting partner down. A decreasing term policy — the usual choice for a repayment mortgage — is designed to track the mortgage balance down as it is paid off, so that a death at any point roughly clears what is left. But it is almost always sized to the mortgage alone. The equity loan sits outside it, growing with the house rather than shrinking with the mortgage. So the policy does precisely what it was set up to do, clears the mortgage in full, and still leaves the equity loan standing — often larger than it was on the day you bought. The debt the decreasing policy quietly ignores is the one that can still force a sale.

If you are not on the title

For an unmarried partner, there is a second problem sitting underneath the first, and it is about ownership rather than debt.

If your name is not on the title, you are not an owner in the eyes of the law, whatever you paid towards the deposit or the monthly payments. When your partner dies, the property passes under his will, or — if he left none — under the intestacy rules, which do not recognise an unmarried partner at all. It goes to whoever those rules name, and Homes England and the mortgage lender deal with that person, not automatically with you. You can find yourself living in a home you helped pay for, with no legal right to stay in it and no standing to deal with the loan secured on it.

Contributing to the mortgage does not fix this on its own, though it can support a claim — the difficult position of having paid without being on the deeds is set out in you paid the mortgage but you're not on the deeds, and the broader question of what an unmarried partner faces when the home is in the other's sole name is covered in not on the deeds, what happens if my partner dies. If you are on the title jointly, the way you hold it still matters enormously, and the difference is explained in joint tenants or tenants in common.

What actually has to happen

Strip it back and there are really only two endings, and cover decides which one is available to you.

The first is selling the property. The sale clears the mortgage, redeems the equity loan at its current percentage of the sale price, and whatever remains passes to whoever inherited. It is clean, it is often what the estate is pushed towards, and it is the outcome most surviving partners are desperate to avoid — because it means leaving the home in the same season as losing the person they shared it with.

The second is keeping the property, which is only possible if several things line up. Whoever inherits it has to be willing for you to stay. You have to be able to take on the main mortgage in your own name — a fresh lending decision, assessed on your income alone, which you can be refused even though you were paying it before. And the equity loan has to be dealt with, either by leaving it in place and continuing the fees, or by redeeming it, which needs money. If a policy exists that clears the mortgage and settles the equity loan, keeping the home moves from a hope to a real option. If it does not, the maths usually points back to selling.

Making sure the cover clears both

The fix is not complicated once you see the gap, but it does have to be deliberate. Cover intended to keep a surviving partner in the home has to be sized to both debts, not just the mortgage.

In practice that means the sum insured needs to include the equity loan's share of the property, and because that share grows with house prices, a rigidly decreasing policy pinned to the mortgage balance is the wrong tool for that part of the debt on its own. Some couples cover the mortgage with decreasing term cover and add a separate level amount for the equity loan; others review the figure periodically as house prices move. The point is that the equity loan has to be named as something the cover is meant to clear, rather than assumed to be handled by a policy that was only ever measuring the mortgage.

What any of this would cost, and whether an insurer will offer it, depends on your age, health and circumstances and is settled by underwriting — this page does not and cannot quote premiums. What an FCA-authorised broker can do is size cover against your actual mortgage and the current value of the equity loan, and set it up so it pays out to the survivor rather than into the estate. You can get life insurance quotes as a starting point, and work through the rest of an unmarried couple's exposure in our guide to dependants and unusual family shapes.

Scotland, Wales and Northern Ireland

Help to Buy: Equity Loan as described here was an England scheme run by Homes England, and the equivalents elsewhere were run separately and are not identical.

Scotland and Wales operated their own Help to Buy schemes with their own terms and their own closing dates, so the detail of fees, percentages and repayment can differ from the English scheme even where the broad shape — a shared-equity loan repaid as a percentage of value — is similar. Northern Ireland did not run a Help to Buy equity loan of this kind, relying instead on a long-standing co-ownership model, so a borrower there faces a different set of rules again. Wherever the property is, the underlying warning for an unmarried partner holds: the shared-equity debt survives the death, and an unmarried partner's right to the home is not automatic. A cohabitant's specific position on the home in Northern Ireland is set out in a cohabitant's claim on the house in Northern Ireland. If you are unsure which scheme and rules apply to your property, the free, impartial guidance at MoneyHelper covers Help to Buy and shared equity across the UK.

Frequently asked questions

Does the Help to Buy equity loan have to be repaid if the borrower dies?

The loan is not written off on death. It stays secured by a second charge and is normally repaid when the property is sold or the main mortgage is redeemed. The amount owed is a fixed percentage of the property's market value at that point, not the sum originally borrowed, so on a home that has risen in value it is larger than the amount lent.

Can I stay in the house if my partner dies and I am not on the deeds?

Not automatically. The property passes under your partner's will or the intestacy rules, and the lender and Homes England deal with whoever inherits it. Staying usually means the estate keeps the property, you can take on the mortgage using your own income, and the equity loan is dealt with — none of which is guaranteed, which is why it is worth planning for in advance.

Does mortgage life cover clear the equity loan as well?

Usually not. A decreasing term policy is normally sized to the repayment mortgage alone, so the equity loan sits outside it and remains owed. If you want both cleared, the sum insured has to include the equity loan's share of the property value, which rises as house prices rise rather than falling with the mortgage.