We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Help to Buy Confusion
Options
Madglover
Posts: 16 Forumite
Hello,
So we've just met with our mortgage consultant as prospective new buyers. Exciting and scary at the same time.
We have been looking at the H2B equity loan
The rates we could get are incredibly low and obviously tempting as you are techinically using a 75% LTV. Our broker was showing us the rates etc. But on a prospective £300k house it would be £60k of equity loan
The fees are then after 5 years 1.75% of the loan per month is that normal that would be £12k a year so 20% interest subject to rise at 1%+ rpi per year?
Or is this which confusing me?
https://www.which.co.uk/money/mortgages-and-property/first-time-buyers/guides/help-to-buy/help-to-buy-equity-loans
So we've just met with our mortgage consultant as prospective new buyers. Exciting and scary at the same time.
We have been looking at the H2B equity loan
The rates we could get are incredibly low and obviously tempting as you are techinically using a 75% LTV. Our broker was showing us the rates etc. But on a prospective £300k house it would be £60k of equity loan
The fees are then after 5 years 1.75% of the loan per month is that normal that would be £12k a year so 20% interest subject to rise at 1%+ rpi per year?
Or is this which confusing me?
https://www.which.co.uk/money/mortgages-and-property/first-time-buyers/guides/help-to-buy/help-to-buy-equity-loans
0
Comments
-
I have no idea how the equity loan works but surely this is a question for your broker?0
-
You will not be charged loan fees for the first five years of owning your home, but, in the 6th year, you will be charged a fee of 1.75% of the loan’s value. After this, the fee will increase every year in line with inflation. The annual increase in the fees is worked out by using the Retail Prices Index (RPI) plus 1%.
For instance, if the RPI is 5% at the end of Year 6 of your Equity Loan, the fee will increase by 6% from 1.75% in Year 6 to 1.86% in Year 7 (which is 1.75% + (1.75% x 6%) = 1.86%).
taken from: mortgageadvicebureau website0 -
Page 18 explains how the payments are calculated. If you have a £40K loan you pay £712 in year 6.
https://www.helptobuy.gov.uk/wp-content/uploads/Help-to-Buy-Buyers-Guide-Feb-160216.pdf0 -
I don't think you pay 1.75% per month, you will be charged 1.75% of the loan value in year six and will pay it back monthly. It's not very clear from the link you posted but that seems more likely than them suddenly expecting a grand extra from you every month.
Have a look at page 3 on this PDF from Santander, I think it explains it fairly well: https://www.santander.co.uk/csgs/StaticBS?blobcol=urldata&blobheadername1=content-type&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobheadervalue2=inline%3Bfilename%3D582%5C688%5C090114_pdfb.pdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1314015991757&maxage=36000
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 350.8K Banking & Borrowing
- 253K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.8K Work, Benefits & Business
- 598.6K Mortgages, Homes & Bills
- 176.8K Life & Family
- 257K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards