Trying to understand Help To Buy equity and mortgage

TJ901

Hi,

I'm hoping someone here has some knowledge of the government's HTB equity loan scheme and can help?

I'm trying to do some calculations but am not sure whether I should be including the 20% loan by the government as part of my deposit. I recently spoke to a mortgage adviser in the bank who admitted they'd not done a HTB mortgage yet but based all of her calculations on a 90% LTV product.

House is 250k, 20% (gov loan) would be 50k.

Any idea which rates I should be looking at? If I include the 50k loan in my deposit, that = 70k which is a 72% LTV ratio, whereas not including it it's only 20k of 200k which is 90% LTV.

Hope that makes sense and thanks very much in advance!

kingstreet

HTB lenders have special products, usually tagged "HTB" or "Affordable Housing" so don't look at the LTV, look at the product description.

IIRC for Nationwide, use the FTB/HomeBuyer products based on the correct LTV, for example 75% if you are looking for 20% equity loan and 5% deposit.

koexelek

TJ901 wrote: »

I recently spoke to a mortgage adviser in the bank who admitted they'd not done a HTB mortgage yet but based all of her calculations on a 90% LTV product.

Branch based adviser in not knowing what they are talking about shocker
These products are quite technical and not all lenders offer them.
I've been arranging mortgages for decades and they still really make me think when I'm doing one

amnblog

TJ901 wrote: »

I recently spoke to a mortgage adviser in the bank who admitted they'd not done a HTB mortgage yet but based all of her calculations on a 90% LTV product.

Unbelievable, please tell us which Bank. :rotfl:

kingstreet

Santander, Leeds or Chorley?

They are the newest members of the HTB club.

amnblog

Lets not let the others off the hook KS.

Looking forward to them having to regulate these clowns next year.

TJ901

Thanks for the information, I suspected as much as it'd be a massive flaw of the scheme if the equity loan wasn't counted as part of your deposit (and thus making your rates much higher!).

It was actually Nationwide who my local HTB agent had told me support HTB mortgages, although I live in London so newbuilds from eligible developers are sparse (so no wonder she didn't have any experience of the scheme!)