Best ways to pay off Help 2 Buy equity loans?

sliyk

getmore4less wrote: »

It might not be £75k then the clue is equity loan.


The real saving is interest free on £75k and a lower rate on the rest.

From that you can work out how much house prices need to go up in the 5years to be worse of with the HTB over just buying all of it.

You are right it is actually 20 percent of the house price. But at the current house price it comes to about 75k.
Predicting house prices is like playing the lottery.:rotfl:

getmore4less

sliyk wrote: »

You are right it is actually 20 percent of the house price. But at the current house price it comes to about 75k.
Predicting house prices is like playing the lottery.:rotfl:

you missed the point,

You don't predict where they will go, you work out what they need to go up by to start being worse off, as that is when paying of the equity loan becomes far more urgent.

If they start to move you make the call to pay off the debt or not.

if they don't move you hang on for the full 5 years, then review depending on the rate of mortgage and rate of the equity loan.


if you lodge the savings with the same places as the mortgage can you pretend that you are offsetting so the interest does not count as interest it counts as a saving on interest you pay?
(depends why you don't want to earn interest)

depending on your lenders rates for additional borrowing and type of mortgage ERC you may face will determine if you save the money or pay down the debt so you are ready to pay off the equity loan when the time comes to pull the trigger.

sliyk

getmore4less wrote: »

you missed the point,

You don't predict where they will go, you work out what they need to go up by to start being worse off, as that is when paying of the equity loan becomes far more urgent.

If they start to move you make the call to pay off the debt or not.

if they don't move you hang on for the full 5 years, then review depending on the rate of mortgage and rate of the equity loan.


if you lodge the savings with the same places as the mortgage can you pretend that you are offsetting so the interest does not count as interest it counts as a saving on interest you pay?
(depends why you don't want to earn interest)

depending on your lenders rates for additional borrowing and type of mortgage ERC you may face will determine if you save the money or pay down the debt so you are ready to pay off the equity loan when the time comes to pull the trigger.

You've made a few valid points there. I must confess i don't know how to check the price of my home (considering it was completed only in November). I am only judging it by the builder keeping the same price for similar properties in the development.
Obviously if we were to see that prices are rising quickly (again unsure how to check) we will prioritise repayment of the equity loan.

BuzzLightyear

sliyk wrote: »

You've made a few valid points there. I must confess i don't know how to check the price of my home (considering it was completed only in November). I am only judging it by the builder keeping the same price for similar properties in the development.
Obviously if we were to see that prices are rising quickly (again unsure how to check) we will prioritise repayment of the equity loan.

This is (or certainly has been in recent years ) a key point...
I bought my HTB 4 years ago and in the process of moving home.
My HTB loan was £60k and i took it just to ease the mortgage payments.....but the property has gone up 50% in that time and now i will be repaying £90. The difference on the mortgage from memory would have been approx £220 a month so im a good £20k out of pocket. Dont you just love hindsight..?

sliyk

BuzzLightyear wrote: »

This is (or certainly has been in recent years ) a key point...
I bought my HTB 4 years ago and in the process of moving home.
My HTB loan was £60k and i took it just to ease the mortgage payments.....but the property has gone up 50% in that time and now i will be repaying £90. The difference on the mortgage from memory would have been approx £220 a month so im a good £20k out of pocket. Dont you just love hindsight..?

We are quietly saving to pay back the HTB. Did you try to staircase your payments? That is what I intend to do, even if is paying back 10 percent chunks at a time. Does anyone have experience of paying back HTB within 5 years? Is it worth it (financially as well) to pay back in 10 percent increments?

kingstreet

It's 10% of the property value, ie half the 20% equity loan, not 10% of the loan balance.

missplant

we are also going to pay back the H2B loan hopefully next year, we are currently over paying the mortgage by £250 minimum a month to get a better LTV. Then depending on what the RICS valuation is either the whole amount or 10% will be remortgaged


with regards to stair casing the payments I think you will have to pay twice for everything e.g the admin fee £200, RICS valuation, solicitors ect. will be worth getting more information

sliyk

kingstreet wrote: »

It's 10% of the property value, ie half the 20% equity loan, not 10% of the loan balance.

So you mean that either the whole loan (20 percent of home value) should be repaid or half of it (10p percent of home value should be repaid). You cannot pay in any other increment?

Grezz24

Thats correct Sliyk you can pay a maximum of two payments, 10% of the total house price, not 10% of the equity loan value you took.

kingstreet

You can find out about redeeming, staircasing etc here;-

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