Help To Buy Equity Loan Calculator

mattb87

Hi everyone,

Quick question. I've plugged all my details into the Help To Buy Equity Loan Calculator spreadsheet. It comes with a debt to household income ratio of 53%. It says the maximum is 45%.

Is this a total hard limit and if I were to apply for Help To Buy with these numbers am I likely to be rejected?

One thing perhaps to note is the Help To Buy Equity Loan Calculator has a field named "mortgage term required". It says maximum is 40 but for some reason it won't let me change it from 25. I'd like to change it to be 30 or 35. If this were the case would this make the numbers a bit better?

Grateful for your thoughts!

Cheers

black_wings

As I understand it the 45% is an absolute rule and cannot be negotiated under any circumstance.
I am currently going through the help to buy process and awaiting my mortgage decision.
So speaking from my current experience few things to consider:
-Not all lenders will go to 40 year term, most will accept 35 though.
-Just because you pass the help to buy calculator doesn't mean you will pass the affordability checks with the lender. For example, they will add 3% of the equity loan as a committed monthly outgoing.
-Also consider if it is a leasehold flat the service charges and ground rent that will further reduce affordability.
-Can you pass affordability when lenders will stress test your mortgage repayments to 6-7% interest rates?

If you go onto Nationwide and Barclays intermediary sites you will find some useful calculators to gain a better idea of what is likely to be accepted. The Barclays one in particular I found useful as it actually tells you how much 'disposable income' it reckons you should have left over each month after all other commitments been paid as well as stress tested mortgage rate.
As long as you are honest about your outgoings (don't forget to add the 3% equity loan as an outgoing) then this will give you a good idea of what you can lend.