Help to Buy Loan

Colligan

I have just reserved a brand new house via the help to buy scheme, i am just wondering if i understand it correctly.

The government loan is for 20k with myself providing a 5 k deposit.

I understand i need to start paying this back in year 6, is this via a monthly repayment or in one go? Thanks.

Ravesquire690

Hi,

The HTB loan is interest free for the first five years. From the sixth year interest starts to be applied.

From what I understand, the equity loan has a maximum term of 25 years and can be repaid at any point in that term!

I hope this helps!

Lilla_D

Whilst we can give you general info here, you may be better off doing your mortgage with the help of a mortgage broker, who can then guide you through the whole process.

In answer to your question, you can put down 5% deposit and get 20% government loan (I assume that you're not in London, otherwise you could get a max 40% government loan). If you buy for £100k, then indeed the above means £5k deposit and £20k loan.

You will start paying interest after 5 years and it will be monthly instalments. Check out the official Help to Buy website, where you will find lots of useful info.

Colligan

Thanks to you both. I do have a mortgage broker, i was just wanted some advice on here.

Any idea on how much those monthly repayments would be at a rough guess? thanks.

dimbo61

This depends on how much you are paying for the property ?
How much deposit you are putting down ?
Size of mortgage and interest rate, length of term.

kingstreet

https://www.helptobuy.gov.uk/wp-content/uploads/Help-to-Buy-Buyers-Guide-Feb-2018-FINAL.pdf

Page 20. Starts at 1.75% per annum.

Link to the organisation which handles post-sales issues;-

https://www.myfirsthome.org.uk/

The HTB Loan can only be repaid in upto two chunks of 10% of the property value, or one of 20%. There is no option to repay "on the drip."

dimbo61

So please be aware that you start paying interest on the loan from year 5
If you can overpay the mortgage every month for the 5 year interest only period this will put you in a better position to remortgage the mortgage balance and loan into a bigger mortgage.