Help to Buy London - How much am I eligble for?

Tanarif

Hi, just curious as to how exactly this works as not 100% sure. I have a £35k deposit, if I took out the 40% london help to buy how much of a mortgage am I eligible for? My salary is £35k a year.

Thank you

megaginge

Impossible to say but I fancy some back of the fag packet maths so why not...

Notice to other MSE ers: Please do point out all the places that this is fundamentally wrong as I don't want to mislead ...


Well you're paying for a mortgage on 60% of the property price,


You can assume 4.5x your income on a mortgage all things being equal. So Let's say 150.

So 150/1.4 is 250, give or take. So you could buy up to the 250k limit on that salary. IF you have no other expenses.

But 5 years from now you'd owe 40% of an asset that is PROBABLY, being realistic, now worth 320k or more.

They put in 100k, They'll want 130 back.

Bear that in mind.


PS, there are specialist HTB brokers out there, who you'll need to arrange the mortgage anyway most likely - and I'd expect banks offering HTB if you wanted totry and go direct would have people knowledgeable to discuss this with you also...


PPS, I think this is a bad idea. 20% was arguably already causing a problem. This 40% scheme is nuts especially given the way prices are booming. In 5 years will you be forced to sell to give them their money back? Probably. And you'll only have about 80k equity (based on 30% compound growth in the property) left, so what will you buy then? You'd still only be able to get a 150k mortgage unless you're convinced about pay rises and at this point london property is all appreciably more expensive ...