Help to buy

Houseno45

Question?
If you have a lump sum of money, is it better to pay off your mortgage or the help to buy grant ? 

jmmo20

if you are past the 5 year interest free period, I'm fairly sure the interest in the HTB loan is a lot higher than any mortgage.
IF you are in the first 5 years it might be worth overpaying your mortgage now and then pay off the HTB loan when it comes to remortgaging. 

it's all personal though, we aren't all that kind in increasing our debt so we'll pay off the HTB first on year 6

greatcrested

What are the respective interest rates?

steampowered

Definitely pay off the HTB component. 

You need to pay interest on the HTB equity loan after 5 years.

Also, you will need to pay a share of the property price to pay off your HTB equity loan - so the size of the HTB loan increases with house prices. If house prices double, your HTB equity loan doubles. That does not happen with a regular mortgage.

After you have paid off your HTB loan, you will have a decent LTV, so you can remortgage your mortgage onto a cheaper rate.

kerry_w_90

Totally depends on the amount of funds you have, do you have enough to pay off the H2B loan completely? If so great as paying it in ladders (a small amount here and there) will just cost you more in the long run, remember each time you pay a small amount on the H2B it's going to cost you in legal fees, in which case if you can it's better to pay that off in one go.

But I echo what others have said if your still in the interest free first 5 years of the H2B then use the funds to reduce the mortgage as your paying interest on that but again its a personal choice