To pay or not pay off Help to Buy loan?

ExR

Hi all,
I have a slight dilemma. I live alone and bought a newbuild house almost a year ago using the Government Help to Buy scheme to fund 20% of the property. (£37k) I have now saved up nearly £47k and on paper I'm in a position to pay it off. I reckon the house has gained around ~£10k in value since I bought it, thanks to stamp duty changes inflating house prices. 
I'm in a reasonably stable IT job (salaried) but due to these peculiar times, I'm unsure if now is a great time to pay off the loan or if it's better to bank the money in case I do lose my job. There is currently no indication of that happening but at the moment I can sleep at night knowing that even in the worst case scenario, I can keep myself afloat for a while. On the other hand, I'm aware that house prices are increasing and the amount I will pay back on the loan will likely increase too.
I'd appreciate any advice or thoughts particularly for anyone in a similar situation.
Cheers

K_S

@exr To some extent it depends on where you think your house's price will be in 4 years. If you think it'll go up significantly, then it may make sense to consider paying it off sooner rather than later. If you think prices are going to stagnate, then paying off an interest free loan early would make less sense if you can use that money elsewhere, say to overpay your mortgage.

getmore4less

I did a number crunch a while back on a  H2B  against a 95% and it was something silly like 40% rise over 5 years to lose out taking the H2B rather than the 95% with the 20% interest free and 75% on a lower rate for 5 years.
not that many were in that position in the first place knowing they would have the funds and could overpay as if they had taken the 95%.

You are  going to swap interest free for some cash that earns very little so it is a house price direction call

What mortgage do you have, what rate and ERC there may be a ditch the fix option if you can get the LTV down enough

£195   H2B, £39k  mortgage a bit less now should be under <71% LTV and you can take it below 70% if needed.

You seem to be generating a  decent cash surplus that makes the overpay option and pension(for 40% tax money) worth looking at first again being sensitive to house price movements. 

How long till you have saved H2B 20% and say 6 months and 12 months of expenses

  


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Thrugelmir

The HTB loan is interest free for the first 5 years. Overpaying your mortgage, up to annual permitted limits,  is one option. Then clearing the HTB loan when the term expires by remortgaging.