Help to Buy - Mortgage Product runs out next year..

rh203

Hello,

I have a mortgage from Halifax on the help to buy scheme which I took out almost exactly one year ago. As the product is for 2 years from the lender I will obviously be looking to remortgage next year some time, however I am not clear given that the Help to buy scheme lasts for 5 years if I am still restricted to a choice of certain products or if I can now open up to the other offers on the market?

Would anybody have any insight on this?

Thanks in advance,
RH

kingstreet

Equity Loan or Mortgage Guarantee?

rh203

Equity Loan

kingstreet

The only significance of the first five years is you pay nothing. As long as the equity loan remains in place, you will find a restricted choice of lenders.

You can ask Halifax for a customer retention product.

If you wish to consider remortgaging, you first need to contact HOP about the treatment of the equity loan and how to obtain a deed of postponement;-

http://www.myfirsthome.org.uk/

When you have sufficient equity to remortgage to repay it, or have repaid the equity loan some other way; you will then have the freedom of the whole mortgage market.

rh203

Ok thanks for the info - very helpful.

Regarding the customer retention product, that reads to me as if it would be remaining with Halifax but asking them for a further product beyond the 2 year period of the current one (avoiding the variable rate which we will inevitably be on).

Is standard practice not to re-mortgage anyway after an initial product has ran out (even on a normal / non-help to buy mortgage) as the buyer will nearly always begin paying the higher variable mortgage?

Thanks again.

kingstreet

The choice you have when the initial product expires is customer retention product from existing lender, or remortgage to a new lender as an alternative to the follow-on rate which applies to your current mortgage, normally standard variable rate.

Confusion seems to centre on use of the word remortgage. Staying with your existing lender is a customer retention deal, or in Halifax patter a "product transfer." This is current lender offering you another fix or other special rate.

A remortgage is a new mortgage with a new lender on the current property to repay the existing mortgage. This requires a change of mortgage deed, hence the "remortgage."