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Should I use help to buy or not?
philb66
Posts: 3 Newbie
Just wondering whether it is worth using help to buy if I actually have the money to put into the house so opinions would be appreciated.
Purchase price is £264950.00, help to buy equity loan is £52990.00. I fully intend repaying the equity loan in full at the end of the 5 year 'interest free period'.
At the end of the term I have to get an independant valuation (few hundred pounds) and pay a £250 redemption fee. I am also liable to pay help to buy 20% of the value of the house. So if the price of my house does not increase in the next five years then no cost, but say if it goes up to £300000.00, 20% of that is £60000.00.
60k - 52.990k leaves me having to pay help to buy just over 7k (plus the redemption and valuation fees).
My initial thoughts where that I would just invest the £52990 over the 5 yrs to cover the help to buy but even with a modest value increase to £300k is it worth it? Of course if the value of the house comes in more after five years then its going to 'cost' even more.
A bit of a gamble to keep 53k free, any thoughts or advice?
Many Thanks:)
Purchase price is £264950.00, help to buy equity loan is £52990.00. I fully intend repaying the equity loan in full at the end of the 5 year 'interest free period'.
At the end of the term I have to get an independant valuation (few hundred pounds) and pay a £250 redemption fee. I am also liable to pay help to buy 20% of the value of the house. So if the price of my house does not increase in the next five years then no cost, but say if it goes up to £300000.00, 20% of that is £60000.00.
60k - 52.990k leaves me having to pay help to buy just over 7k (plus the redemption and valuation fees).
My initial thoughts where that I would just invest the £52990 over the 5 yrs to cover the help to buy but even with a modest value increase to £300k is it worth it? Of course if the value of the house comes in more after five years then its going to 'cost' even more.
A bit of a gamble to keep 53k free, any thoughts or advice?
Many Thanks:)
0
Comments
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If you have the funds to put down a good deposit for the house without the need for an equity loan top up i would recommend steering clear of help to buy. I however, used help to buy as i didn't have enough for a large deposit and i didn't have great credit rating!
My house price was the same
Haven't brought the same new build have you? :jFinally going to be a homeowner:T0 -
What deposit do you have and how do the mortgage rates compare?
Over five years, £7k may be a lot less than what you save on mortgage interest from;-
borrowing less
a lower mortgage rate.
Then if property values don't rise, you'll pay back less than what you borrowed.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Hi,
The best mortgage I can get is £50 a month cheaper (no arrangement fees) so over 5 years thats £3120.00 saving on my current arrangement. Thanks for pointing this out! :-)
We don't need to or want to borrow any more on our mortgage even if we are using help to buy, (current mortgage is for £126 k).0
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