The Homebuy scheme helps people to buy a home on the open market, and is operated by Devon and Cornwall Housing Association

By helping some people to buy, the scheme frees up their homes for rent by others in housing need. So the only people who can apply for the scheme are:

• existing housing association tenants
• those on housing waiting lists who are nominated by the local council as being in housing need.

The money available for Homebuy is limited, so not everyone wishing to take part can do so. Before deciding to buy a property, you should take your own independent financial advice to get a clear idea of the costs and obligations of home ownership.

If you qualify for the scheme, you will need to contribute 75% (three quarters) of the purchase price of a home through a mortgage and personal savings. The registered social landlord will lend you the remaining 25% (one quarter).

There are no monthly payments on the loan from the housing association that covers 25% of the purchase price. Instead, you repay it when you sell the home. The amount you repay will be 25% of the value of the home at the time you sell it. If you want to, you may repay the loan before you sell, in which case what you repay will be based on the value of your home when you pay back the loan. It is important to remember that the loan must be repaid when you sell the home.

For the purposes of the Homebuy scheme your mortgage must be obtained from a building society, a bank, a friendly society or an insurance company. Applicants should under no circumstances incur any costs in obtaining a mortgage (for example, for a property valuation) until the lender offering to provide the mortgage has confirmed that it is one of these types of lender. This loan will be your mortgage, and you will usually repay it on a monthly basis, with the amount sometimes varying if there are changes in interest rates.

When you sell the home that you buy through the Homebuy scheme, you have to repay the loan you took from the housing association.

Under the terms of the loan there are no interest or other credit charges so the loan has no annual percentage rate (APR). But the amount you will have to repay when the loan comes to an end is linked to the value of your home at the time you sell it.

You may have to repay less than you borrowed, but it is likely that you will have to repay more.

If you have to repay more than you borrowed, the effect will be similar to a loan under which you pay credit charges at the rate at which your home has increased in value.

Should you qualify for the scheme, you will be able to ask Devon and Cornwall Housing Association for further examples of the equivalent APR based on local house prices.