Help to buy Mortgage

Ka8888te

In November 2013 we took out a help to buy mortgage on a new build property, we were not first time buyers.


The property price was £325000 and we paid a 5% deposit and had a help to buy arrangement for 20% of the property price. This was interest free for 5 yrs and then will move to a 1% loan after year 5.


Our 5yr mortgage deal expires on Nov 2018 and I am now exploring options to remortgage.


I am dismayed to find that the entire mortgage market is not open to us, instead we are restricted to a handful of help to buy mortgage providers that do not seem to be very competitive.


I understood that I had a 75% ‘mortgage’ and a 20% ‘loan’ - I was not aware that they remain ‘linked’ and thus we could not choose from all mortgage providers.


Have I understood this correctly?


Do you think this product was missold?


My eventual plan was to add the 20% on to the mortgage and start looking for a 95% mortgage, is this even possible?

amnblog

This is not a missale.

Lender need a particular product range to co own a property 80/20.

You can buy out half or all of the non owned equity.

If you buy out all the equity you can use a mainstream mortgage product.

Do not expect to buy out all the equity on remortgage unless the property value has risen by 15% or more.

leshec

Hi,
We have a similar situation - but I'm really happy with the H2B offer. We bought in March 2014 on a two-year fixed rate (2.42%) with Halifax. In 2016 we remortgaged for another 2-yr fixed rate (2.14%). Now it's a decision time if we remortgage for 2-yr again or we pay the Help-to-Buy portion off and get an access to the open market.

If you want to stay with help to buy - Halifax's 2-yr fixed rate is currently 1.84% so not too bad. But you will have to start paying the interest on your government part, which make everything more expensive and pointless (in my opinion - as with your house value it's going to be an extra £100 a month - and will be rising every year - money down the drain).

Our property value rose from £360k to £480k, so after extending the mortgage period by 2 years, we can now afford the 75LTV mortgage when we pay off 20% of the government grant. And mortgage rate is also better (between 1.25-1.5%).

I would advise you to go on Zoopla and check your property price - you might be surprised how much value your house gained!

Good luck!