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Reduce mortgage or clear HTB?
DVN999
Posts: 34 Forumite
Hello all,
We purchased our house in 2015 for £250000 and took advantage of the HTB equity loan scheme, so the government effectively now owns 20% of our home. We’ve now reached the end of year 5 so interest payments are due to begin this month. In the meantime, we are fortunate enough to have saved up enough money to repay it but have a dilemma: should we repay the HTB, which is currently a very low interest rate, or put the money into our mortgage and reduce that?
On the one hand, a potential drop in the market could be good if we want to repay the HTB, but not sure prices would be at 2015 levels just yet? On the other hand, the mortgage is a fixed amount we owe, so it’ll never decrease further, like the HTB amount could if property prices were to continue to dip.
any thoughts would be appreciated!
We purchased our house in 2015 for £250000 and took advantage of the HTB equity loan scheme, so the government effectively now owns 20% of our home. We’ve now reached the end of year 5 so interest payments are due to begin this month. In the meantime, we are fortunate enough to have saved up enough money to repay it but have a dilemma: should we repay the HTB, which is currently a very low interest rate, or put the money into our mortgage and reduce that?
On the one hand, a potential drop in the market could be good if we want to repay the HTB, but not sure prices would be at 2015 levels just yet? On the other hand, the mortgage is a fixed amount we owe, so it’ll never decrease further, like the HTB amount could if property prices were to continue to dip.
any thoughts would be appreciated!
0
Comments
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I would wait, however factor in 1500 to pay the loan off as wellDon't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.0
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Are you basing that on expecting the market to drop in future?0
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