H2B mortgage search

samehsameh

Hi, I've spent a good amount of time looking for an answer to this question but not found anything, that could mean it's obvious so apologies if it is.

When looking at lenders to see how much they will lend, I have tried 2 ways when it comes to what I would like to borrow. 

a) Taking 20% off the asking price and inputting my current savings as a deposit.

b) keeping current asking price and adding 20% of house value to my deposit.

I didn't think it would matter as I thought they lend on what you can afford to pay back, which would be the same in either scenario but I'm getting offered more from some providers when doing b) vs a).  Also, I presume I have to take the specific "help to buy shared equity mortgages" with the less attractive interest rate vs a normal mortgage?

Many thanks

kingstreet

You need to work only with the actual mortgage amount. Your HTB loan and deposit will go on top to produce your maximum purchase price. Don't forget many lenders will want 3% of the equity loan included as a cost in mortgage affordability and that you have to satisfy the Government's HTB affordability calculator as well.
Yes. Specific HTB/Affordable Housing products only.

Celes

It's option b. Just done this myself. You're right the mainstream website's aren't clear. 
But you have to add in an extra amount per month as your committed outgoings (e.g. as a loan, mortgage category) for the affordability calculations. Even though it's 0% for 5 years, they want to imagine that you are paying back typically 3% of the equity loan each year (then divided by 12 months). Santander was 2% but all the other ones I looked at were 3% in the T&C's. 

amnblog

How much lenders will lend is not the issue. Affordability under the Help to Buy Scheme itself is tighter and the deciding factor.
Your Broker will assist you with this.