Remortgaging and paying back HTB Equity Loan

rle_GL52

Hi! 

New to the forum and have been looking for some advice on the Help to Buy Equity Loan scheme. 

Around 5 years ago my wife and I purchased our first property. The value of the property was 250k. We put down a 12.5k deposit and used the equity loan scheme. Our total borrowing for the mortgage was 187.5k at 1.9% - a monthly payment of ~£700

Now the 5 year fixed term is due to come to an end at the end of the year and are expecting a steep rise in monthly payments. 

Combined with that we want to remortgage and borrow more to repay the equity loan. 

We’ve looked online and it doesn’t seem overly clear how we go about doing so, how you get the house valued and even some lenders won’t let you borrow the extra money. we’re really looking for someone who’s recently done the same and can share their experience to give us an indication on what to expect. Thanks! 

amnblog

Point one - is should you pay off the HTB loan? If the value is going nowhere, or backwards you are shooting yourself in the foot.

If the value is increasing it may make sense to do so.

If you decide to clear the HTB Loan.

You start by getting a RICS valuation on the property which then establishes how much you need to raise to clear the HTB Loan (20% of the value)

If you are smart you use a Broker for this process.

kingstreet

I agree with amn. Very few people are repaying the equity loan by remortgage as you're replacing 1.75% interest-only with about 4.5% on repayment. However, you can find instructions here;-

https://www.gov.uk/government/collections/manage-your-help-to-buy-equity-loan#repay-your-equity-loan

Dave_Z

We're redeeming ours now as part of a sale and it's been relatively painless.  Just make sure you give them a call to chase through each step if you haven't had an email or letter confirming things are progressing.  We had to follow up a couple of times when progress seemed to have stopped, but each time things were quickly back on track and the H2B team have always been very helpful on the phone.

Our neighbours remortgaged to pay theirs about 2 years ago and prices in our area have barely moved in that time, so we've probably done better out of it as per the above comments.