Help to buy with reasonable deposit.

ed67812

Out of interest we have been to look at local new builds which we like the look of (but obviously need to fully research area, compare sizes to current house when tiny show room furniture has been used, knock on current residents doors to query build quality etc.).

They are being offered on the H2B scheme.

I believe that we would be okay for £300k max loan and would (at worst case scenario or we wouldn't sell up) have about £55,000 equity after fees.

The houses we are looking at are just shy of £350,000 once stamp duty is factored in.

Is it possible to use £52,500 for a deposit of 17.5% and the equity loan of £70,000 at 20% and get a 62.5% HTB mortgage? Or is that nonsense?

My logic would be that things look a little more unstable than ever and so the risk of house prices falling is reduced by taking the equity loan option.

If it is feasible, do HTB mortgages have higher rates? But then we would need a 82.5% LTV without HTB.

Any thoughts would be appreciated.

Time2go

I think you can do 65% mortgage as I've seen a few companies offering it when we were looking for our mortgage

csgohan4

HTB you have to pay back the loan after 5 years at the value of the house the time you pay back, so you may more than likely pay more than you borrowed.


If you don't pay back after 5 years, you will get charged more interest






As Long as your informed and know what your letting yourself into

kingstreet

The minimum mortgage is 25% of the purchase price, so you can put down a deposit of upto 55% with a 20% HTB equity loan.

JPB123

You start paying interest on the equity loan from year 6, you don't have to repay the loan.

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amnblog

HTB mortgages rates are less common but competitively priced.

ed67812

Thanks for the replies. Much appreciated.

HTB mortgages rates are less common but competitively priced.

Taking the numbers from my example:

Does that mean a 62.5% ltv htb mortgage would be competitive with a standard 62.5% ltv mortgage?

Or would a 62.5% ltv htb mortgage be competitive with a standard 82.5% ltv mortgage?

If it's the first option, then there it would seem there is a real chance that using h2b could save money considering the lower interest rate and the fact that the interest is paid on 20% less debt.


Obviously this assumes that houses prices stay stable and there is no massive increase in the value of the house.