Help to buy question

Potbellypig

I was about to start a thread asking a similar question about this...

We bought a house 2.5 years ago for £197k mortgage, £53k HTB loan and £12k deposit and the mortgage was 2.04% for 5 years. I'm looking at figures now as I'm thinking our mortgage is going to skyrocket in 2.5 years time. We pay £650 now and I think that it in 2.5 years time this will go up to about £1000 per month. For the HTB loan, I was thinking that we'd just get this added onto the mortgage after the 5 year period but I think if we do this then the mortgage would be roughly £230k and about £1500 per month! I guess we'd be better just leaving the HTB loan and have the interest add to it yearly after year 5? House is worth about £300k at the minute.

Maybe this HTB loan wasn't the best idea after all.

silvercar

Potbellypig said:

I was about to start a thread asking a similar question about this...

We bought a house 2.5 years ago for £197k mortgage, £53k HTB loan and £12k deposit and the mortgage was 2.04% for 5 years. I'm looking at figures now as I'm thinking our mortgage is going to skyrocket in 2.5 years time. We pay £650 now and I think that it in 2.5 years time this will go up to about £1000 per month. For the HTB loan, I was thinking that we'd just get this added onto the mortgage after the 5 year period but I think if we do this then the mortgage would be roughly £230k and about £1500 per month! I guess we'd be better just leaving the HTB loan and have the interest add to it yearly after year 5? House is worth about £300k at the minute.

Maybe this HTB loan wasn't the best idea after all.

You pay the interest generally, rather than add it to the loan. 1.75% interest in year 6.

whether it was the best idea is moot, it gave you a start without a deposit,

renegade1

I'm on HTB too - main mortgage is currently fixed at 2.24% but the 5 year period is coming to an end this November ( I know great timing right). I've decided to fix for another 3 years while keeping the HTB loan during this period and drip feeding overpayments depending on what I can afford. I thought about fixing for 2 years but this means i'll have to be more aggressive with the overpayments (I want my LTV to be 60% when I add the HTB loan to the mortage). After this period i'll re-mortgage and add the HTB to the loan, at which point i'm hoping interest rates will have come down to around 3-3.5% but that's probably too optimistic thinking.

IT sucks that I will be paying HTB interest for 3 years but looking at the bigger picture keeping the HTB loan until interest rates go back down makes the most financial sense to me.

I don't want to pay a product fee for a tracker when rates are forecasted to go above 6%. Looks like a bad decision.

Is this a good plan?

But yeah, adding the HTB loan to the mortgage at this time when the base rate is so high seems like a very bad decision. Definite no no

chanz4

renegade1 said:

I'm on HTB too - main mortgage is currently fixed at 2.24% but the 5 year period is coming to an end this November ( I know great timing right). I've decided to fix for another 3 years while keeping the HTB loan during this period and drip feeding overpayments depending on what I can afford. I thought about fixing for 2 years but this means i'll have to be more aggressive with the overpayments (I want my LTV to be 60% when I add the HTB loan to the mortage). After this period i'll re-mortgage and add the HTB to the loan, at which point i'm hoping interest rates will have come down to around 3-3.5% but that's probably too optimistic thinking.

IT sucks that I will be paying HTB interest for 3 years but looking at the bigger picture keeping the HTB loan until interest rates go back down makes the most financial sense to me.

I don't want to pay a product fee for a tracker when rates are forecasted to go above 6%. Looks like a bad decision.

Is this a good plan?

But yeah, adding the HTB loan to the mortgage at this time when the base rate is so high seems like a very bad decision. Definite no no

I wish I hadnt paid myn of if honest

marmitesocks

Just to be aware, there is a major issue for anyone trying to make changes/exit HTB at the moment:

https://forums.moneysavingexpert.com/discussion/6455729/help-to-buy-not-answering-phone/p1