Why don't lenders "like" Help to Buy Remortgages

sh856531

Hi all

I've seen a bit in the press recently detailing how there isn't that much appetite amongst lenders for Help to Buy Remortgages. I'm not sure how true that is, versus just some lazy journalists needing something to write about, but assuming it's a least partially true - does anyone have a view on why that might be?

So with a Help to Buy mortgage, my understanding is that the lenders risk is significantly reduced as the government would be the first to take a loss if the customer defaulted. So in my case - the government would need to swallow the first 20% of any loss before Nationwide lost a penny.

Assuming good lending practices, the chances that a good bank would lose much on these deals seems fairly marginal and therefore there is some fairly risk free profit to be made?

Yet we're told that whilst lenders are quite keen on being the original lender, they are less keen to be a remortgager of these deals after the initial 2 - 5 year fix is up.

Does anyone have any insight into why this would be? I know the banks aren't daft, so they must be accounting for a variable that I haven't identified - I just can't figure out what it is

Thanks all

S

Sample article describing the problem:

https://www.mortgagestrategy.co.uk/help-to-buy-remortgage/