Help to Buy interest calculation

San_Jose

Morning all,

I purchased a house in January 2021 using the old help to buy scheme and although a long way off Im trying to get my head round  my options when I come to re mortgage. Reading online regarding the rising cost of living/ interest rates I have been looking into what the interest on the equity loan part of my property purchase (20%) would be as I will either be looking to remortgage the whole amount or start paying interest on it from year 6.

Would I be right in thinking that in year 6 the interest on the help to buy loan would be 1.75% increasing to 1.82% in year 7 and so on until the loan is payed or 25 years. In the current climate these rates would be alot better than I could get on the high street if thats correct?


5 year fixed mortgage rate of 1.86%
House value: £477,500
Help to buy loan amount: £95,500.00
Mortgage mount: £382,000 (minus 5% Deposit: £22,500)

Thanks in advance. Apologies if this is a silly question/ in the wrong place

kingstreet

It's 1.75% in year six, then increases by inflation (RPI) plus 1% each year so if inflation is running at 5%, the rate in year seven is 1.855%, year eight 1.966% and so on...

You also have to take into account the impact of property price reductions/rises as these will impact the capital to be repaid.