Help to buy

Riokeano01

We currently have a help to buy loan which we are in the 7th year of having.  With rising interest rates I was wondering if anybody knew how much it will impact our loan.  

SuboJvR

Riokeano01 said:

We currently have a help to buy loan which we are in the 7th year of having.  With rising interest rates I was wondering if anybody knew how much it will impact our loan.  

Hi,

Your Help to Buy Loan interest in the seventh year is less than current mortgage rates.  It increases each year by a factor linked to the CPI, rather than Bank of England base rate.

In short - right now - your help to buy loan costs you less interest where it is than if you were to try and remortgage to absorb it.

This will be true for a little while so you won’t need to panic about it as such.  I will remortgage to absorb ours if/when mortgage rates drop again, or when we have paid off a fair chunk more of the mortgage to make the LTV that much more favourable.  OR - if house value drops below what we paid (it’s currently about 50k higher).  We don’t plan to move.

kingstreet

SuboJvR said:

Riokeano01 said:

We currently have a help to buy loan which we are in the 7th year of having.  With rising interest rates I was wondering if anybody knew how much it will impact our loan.  

Hi,

Your Help to Buy Loan interest in the seventh year is less than current mortgage rates.  It increases each year by a factor linked to the CPI, rather than Bank of England base rate.

In short - right now - your help to buy loan costs you less interest where it is than if you were to try and remortgage to absorb it.

This will be true for a little while so you won’t need to panic about it as such.  I will remortgage to absorb ours if/when mortgage rates drop again, or when we have paid off a fair chunk more of the mortgage to make the LTV that much more favourable.  OR - if house value drops below what we paid (it’s currently about 50k higher).  We don’t plan to move.

Older HTB loans are RPI-linked, not CPI, but just a fine point in the current circumstances.