Repaying the Help To Buy Equity Loan

homeless9

Hi,

Say you have taken out a 10% help to buy equity loan on a £300,000 property and you wanted to part pay some of this back 2 years after purchasing the property. Lets say the property is still valued at £300,000 after 2 years....so this 10% loan is £30,000....

What is the minimum part amount I can pay of this £30,000?

I am so confused as different sources say different things....


-According to this article on Money Saving Expert you cannot make part payments in this scenario, you have to pay the full £30,000 in one go....this seems like madness. I'd like to pay half of it off, so £15,000....but I can't....they only accept the full £30k?

'The rules state you have to repay at least 10% of the property's current value. For example, you could repay 10% of the property's current value if you took out a 20% loan, or repay 10%, 20% or 30% of the property's current value if you borrowed 40%. If you borrowed less than 20% though, eg, a 15% equity loan, you could only repay the loan in full, as you must part-repay in multiples of 10%.'

Source: https://www.moneysavingexpert.com/mortgages/help-to-buy-equity-loans/


-According to this PDF from gov.uk you can make part payments of at least 10% of the full repayment amount and in the scenario I mentioned above the full repayment amount is £30,000, so 10% of that is £3000.

'You can pay off all or part of your equity loan at any time. You can make part payments of at least 10% of the full repayment amount, based on what your home is worth at the time, to reduce how much you owe.'

Source: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1023596/Homebuyers-guide-to-Help-to-Buy-Equity-Loan-2021-2023_Plain_English.pdf


There are even some articles I have read saying you can either pay half of what you owe or all of it.

Which is it? or am I being dumb and simply not understanding?

bexybest

https://www.gov.uk/help-to-buy-equity-loan

"The smallest repayment you can make is 10% of the market value of your home."

Therefore you would need to repay the loan in full.

Also - the final link you have added relates to the 2021-2023 scheme which seems to have different terms.

chanz4

you can only pay in 10% amounts, survey is around £200 plus £1k solicitiors fee, plus htb fee

homeless9

chanz4 said:

you can only pay in 10% amounts, survey is around £200 plus £1k solicitiors fee, plus htb fee

Thanks. Was wondering if it was worth paying back part of the HTB loan, but paying around £1,400 for these fees twice or more times is maybe not worth it....

Not that it matters anyway as the 10% pay back rule means I can only pay it in full and 10% of the property value is a lot of money which I do not have right now.

chanz4

Im waiting for prices to level before paying off

andyf1980

chanz4 said:

Im waiting for prices to level before paying off

Not sure where you live but ours was worth what we paid 2 years after buying. We repaid the HTB and the house went up £75k in the next 2 years. Of course we paid more interest by doing that but it worked out the right thing.