Best ways to pay off Help 2 Buy equity loans?

Gspree

Are there any fees when paying back the HTB loan as two separate 10% chunks rather than the full 20% at once?

kingstreet

Gspree wrote: »

Are there any fees when paying back the HTB loan as two separate 10% chunks rather than the full 20% at once?

You can find out about the process and the costs here;-

https://www.myfirsthome.org.uk/

I think it's more than likely the costs involved in "staircasing" will be doubled compared to "redeeming" as they will be incurred twice.

wizkh7n

Has anyone here gone past thier 5 years HTB? And what route did you take post 5 years

kendizle

Read some great advice on here. Some confusing, such as "Staircasing". I originally thought the 10% meant I could pay 10% of the 20% loan.

Stuck now with thinking what to do with the money I have saved to repay the 20% equity loan. Nearly at 10% after 18 months of saving. Feeling I should reduce my saving and start over paying too.

Anyone have any experiences of doing this?

Thanks

kingstreet

Staircasing is the term used to describe the purchase of further shares in a shared ownership property and it has also been adopted for the gradual repayment of a shared equity or Help To Buy Equity Loan.

If you haven't already done so, please look at the post-sales HTB Agent's website for further information;-

https://www.myfirsthome.org.uk/

kendizle

After reading this thread I have decided to do both, overpay and continue to save to repay the equity loan at the end of the five year period.

The fees and charges for stair-casing made me think, is it a good move making a double payment for this? Also I'd need to weight this against the increased property value across the second period.

Ive decided to take half of what I was saving for the equity loan, and pay that off the mortgage, because let's face it, 2.5% on my savings account is not making me much money on £400 a month, whereas £200 monthly over-payment is going to save me £8k+ interest on my mortgage and reduce by about 7 years.

Has anyone else considered the same? Have I made the right decision?

Time will tell I guess.

amnblog

The benefits or otherwise of paying off your equity loan will be different for each individual and will depend on a number of factors including:

How the property value has moved
Where it might be going in the near future
If lending is being raised to pay off the equity loan
If it is, the rates available to the purchaser

Of these the value is the key factor.

If values are rising quickly it will be expensive not to purchase as soon as possible as the cost of acquisition is increasing.

If values are dropping, buying out the equity is not smart as you pick up an extra 20% of the risk on the loss.

If values are static the key issue is the cost of the solution to buy out the equity loan v the cost of the equity loan.

Of course, for some householders, buying out the equity loan allows them a level of freedom with regard to letting, other purchases, alterations, or extension, that are the priority.