Help to Buy 2: 7 Year Restriction

Matt320uk

Hi all,

I've received a 2 year fixed rate, 95% LTV, mortgage offer (approved) from Natwest. But have been getting mixed responses regarding this statement in the paperwork:

"You will not be able to apply for additional secured borrowing until the expiry of 7 years from the date of completion of the Original help to buy: mortgage guarentee loan"

Now this makes sense as the government provides the guarentee for a period of upto 7 years.

My query is this, if I were to have enough equity/ overpayed the mortgage enough to re-mortgage at the end of the fixed rate period then what, if any, restrictions would apply?

I was thinking of re-mortgaging in a few years , in my mind the original help to buy loan would be repayed (by the bank) and another mortgage product started. Surely this restriction would not apply anymore as I'd be ending the mortgage guarentee loan and with enough equity commencing a re-mortgage onto a standard mortgage.

You'd think the banks/ help to buy advisers would know. Apparently not!

PBA

As long as you are on the original mortgage (ie same lender and account number) then the help to buy scheme rules apply. So no additional borrowing no matter how much you overpay/how much the property value increases. If you remortgage to another lender then it's not a help to buy loan any more so the rules no longer apply.

Now help to buy is a relatively new scheme, there aren't any mortgages that have come to the end of their initial fixed period yet, so it remains to be seen if lenders will be able to opt out of the scheme to allow additional borrowing. But certainly these are the rules as things stand.

Matt320uk

Cheers PBA,

In your opinion does "additional secured borrowing" simply mean additional borrowing against the property?

Or would it stop me from being able to take out another mortgage and purchasing another property within this 7 year period?

minimike2

Matt320uk wrote: »

Cheers PBA,

In your opinion does "additional secured borrowing" simply mean additional borrowing against the property?

Or would it stop me from being able to take out another mortgage and purchasing another property within this 7 year period?

It does not stop you from purchasing a different property, no.