Is it worth paying off the help to buy if you plan to possibly move?

james_uk

Hi, just wondering as we have lived in our new build house for 5 years. We are at the point where we should start paying the help to buy back but a lot was going on recently and due to the fact me and my partner had talked about the face she would like to possibly move, we decided to defer paying the HTB for now, so are just paying the interest for now until we decide.

In the meantime, I also recently inherited some money and wondered if people think it would be worth actually paying the HTB off or if i would be best leaving it as it would all equal itself out in the end anyway? if i paid it would that more or less be the same in the end as the government taking 20% off the value of the house anyway? I guess the difference to that is the money comes out of the whole house jointly rather than it just me paying it out of my money.

Buy it there any advantage to us to pay it?

And if we decided not to move and stay, would paying the HTB probably bring the monthly cost down a good bit?

The house when we got it was £184,000.

Regards

James

theoretica

If you don't pay off the HTB now you will need to pay interest which will shoot up after the first year *and* the repayment amount will go up (or down) as your house value changes.  What would you do with the money if you don't pay off the loan, and would it earn more than the interest + guessed at change in house price?

Thrugelmir

Settling the HTB maybe a protracted affair. If you are planning on moving at a later date will streamline the process

getmore4less

theoretica said:

If you don't pay off the HTB now you will need to pay interest which will shoot up after the first year *and* the repayment amount will go up (or down) as your house value changes.  What would you do with the money if you don't pay off the loan, and would it earn more than the interest + guessed at change in house price?

It does not shoot up.

Starts at 1.75% which is in line with the mortgage rates.

Even with RPI at 4% would go to ~1.84%

kingstreet

If you repay the HTB loan voluntarily, you repay based on the your chosen surveyor's valuation. If you pay it off when you sell, you repay the HIGHER of your chosen surveyor's valuation and the agreed price. There may be a difference.