Escape HTB loan using a different loan to cap future house price increase (already at £32k increase)

emcb17

Our house price has currently risen by £32k in 2 and a half years meaning our HTB loan amount has gone from £30k to £35k. We are looking to try and escape the HTB scheme by considering a personal loan to pay off the HTB loan and cap any future rising costs and stop the goal posts from moving. We worked out that we would get accepted for a personal loan on the basis of debt consolidation. What are people’s experience of this / do you think this is an option for us to eliminate this element and get it off our backs? Thanks. 

Ryan_Holden

Are you actually allowed to do that? Don't most personal loans end up invalid if they're used to buy property or into property?

emcb17

The criteria on the loan provider just says it can’t be used to pay off mortgage payments etc but would this be classed as something different? Not sure on either side really that’s why I’m seeing if people have ever done this before as I don’t know what’s allowed 

silvercar

With house prices expected to drop - or at least  not increase - in the next year, I’m not sure now is the right time to make this move.

You’re effectively using the money for a lump sum capital repayment, so definitely not a mortgage (monthly) payment.

You need to do some maths to see if it is worth it, you are currently paying zero interest on the HTB, so taking a personal loan at X% to clear that doesn’t really make sense, unless you are convinced prices are going to increase. Even if house prices were increasing and you wanted to be rid of the HTB, usually the best way is to increase your mortgage to cover the HTB. It’s a lower interest rate, over a longer period.

emcb17

silvercar said:

With house prices expected to drop - or at least  not increase - in the next year, I’m not sure now is the right time to make this move.

You’re effectively using the money for a lump sum capital repayment, so definitely not a mortgage (monthly) payment.

You need to do some maths to see if it is worth it, you are currently paying zero interest on the HTB, so taking a personal loan at X% to clear that doesn’t really make sense, unless you are convinced prices are going to increase. Even if house prices were increasing and you wanted to be rid of the HTB, usually the best way is to increase your mortgage to cover the HTB. It’s a lower interest rate, over a longer period.

Thanks so much for the advice 

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