Remortgaging with HTB equity loan

paulngui

My wife and I are currently part way into a 5 year fixed term mortgage which coincides with the 5 year interest free period on our 30% Help to Buy equity loan.  This commenced November 2019, so will take us up till November 2024.  We'll want to remortgage at the end of this period so as to avoid the high follow-on rate.

We've been making pretty good savings, however the amount we're saving each month has recently reduced significantly having welcomed our first child recently.  Once my wife's maternity leave ends and she returns to work, I expect much of what we were saving would go onto childcare.

My question revolves around what's the best thing to do with the savings we have made so far, and what little savings we will make moving forward for the foreseeable.  I was originally thinking it best to work towards paying off the first 10% increment of the equity loan, but now our savings are heavily reduced this will be harder to achieve.  Are we then best to pay off what we can from the mortgage now so as to minimise the interest we're currently being charged?  We're already making regular monthly overpayments (within what's allowed without incurring fees) to help pay it off faster, but I'm not sure we'll be able to cover the equity loan yet when we remortgage, based on the MSE mortgage calculator.  All of that said, we will likely sell up at some point and move back to NZ where we're from, in which case we're probably still best to make overpayments on our mortgage to further reduce the interest being paid now?

Any thoughts/suggestions on this would be great!

chanz4

its going to cost around 1-1.5k to pay the loan off, the rates are not that high even after the 5 years. The amount due will be 20% of the house value