Help to buy questions

kasia129

Hi, I'm looking into the Help to Buy scheme. I have two questions about it:
1. Are you allowed to have a lodger? I know you can't sublet the whole flat but is renting out one bedroom, while still living in the flat seen differently?
2. Are you allowed to make prepayments on your main mortgage (the one provided by the bank) ahead of staircasing the equity loan?

Thank you,
Kate

dimbo61

Having a lodger while you are living in the property is completely different to renting out the whole property.
The government set up the rent a room scheme and have recently increased the amount you can earn Tax free to £7500.
I would read all of the information you can find about Help To Buy

The Help to Buy loan is Interest free for 5 years so if you can overpay the Mortgage on the property you will pay down the Mortgage debt while increasing the equity.
This will help in 5 years time if you are then looking at taking out a bigger mortgage to pay off the Help to Buy loan

silvercar

kasia129 wrote: »

Hi, I'm looking into the Help to Buy scheme. I have two questions about it:
1. Are you allowed to have a lodger? I know you can't sublet the whole flat but is renting out one bedroom, while still living in the flat seen differently?
2. Are you allowed to make prepayments on your main mortgage (the one provided by the bank) ahead of staircasing the equity loan?

Thank you,
Kate

1. yes
2. yes but you may be better off saving the money separately to pay down the equity loan after year 5 when the interest charges kick in.

You could reduce the mortgage from the bank, but you risk not being able to increase the mortgage when you need to eg if your salary drops or a lender judges the mortgage unaffordable or property prices fall to a level where a lender won't give you the amount you want.