HTB equity loan or OP mortgage

bwfc1958

Hi,
Apologies if this is in the wrong place. I wasn't 100% sure where to put this post!

Im after some advice/opinions with regards to whether it is better to OP our mortgage or look to pay off our HTB equity loan? Or whether it matters at all? It has got us a bit confused.

we bought a new build house for £170,000 6 months ago.
Deposit - £20,000
HTB - £34,000
Mortgage - £116,000..

We are committed at the moment to putting £400 away each month -this currently just goes into our savings account. My question is, is it best to do this and get us as close to paying off the HTB loan as quickly as possible or is it best to over pay our mortgage by £400? And then possibly look to remortgage after the 5 years intrest free period comes to an end and look to pay the loan off this way? (Im not even sure how that would work, Im by no means an expert!! But I am looking to learn)

Thanks for any help

chanz4

don't forget its not what you borrow, its a percentage of the house price

spriggsy

The minimum you could pay off in one go on the HTB part would be 10% of the market value (or half of the HTB loan). So unless you can save £17k (if your house is still worth 170k) then you aren't going to be able to pay anything off anytime soon.

What I do is overpay my mortgage each month, and then the plan is to re-mortgage and borrow enough to pay off the HTB loan before the 5y interest free period is off. The overpayments will have built up a bit more equity.