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Help to Buy

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SR11
SR11 Posts: 1 Newbie
in House buying, renting & selling
Hey my partner and I have a new income of about 35k per annum and we wanted to purchase a house and started looking into help to buy scheme. We are apprehensive around the equity loan, we were wondering whether we can pay it back within 5 years when it’s interest free? At that point would I still need to pay back 20% of the current value of the property or how much I borrowed from the government (which ever is the highest).

We are hoping to do this but we were wondering what the likelihood of it actually doing it might be ? We are looking in the ranges of houses within 150k.

Comments

  • da_rule
    da_rule Posts: 3,618 Forumite
    First Post First Anniversary
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    Yes you can pay it back at any time.

    It is based on the value of the house when you make the repayment. The government is hoping that the value will increase and therefore they will receive more than they lent.
  • jonesydave
    jonesydave Posts: 21 Forumite
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    Hi SR11

    How much savings do you have towards a deposit? Personally I decided against the equity loan, but that was because I had a sufficient deposit. There are many pros to the equity loan, although there will be increased solicitor costs in the mortgage process as its more work for them. Secondly, you can pay it back at any time, but a minimum of 10% of property value, e.g. 200k house would have to pay back 20k.

    Although... as da_rule says it is based on the value of the property, which will mean when you wish to pay % of the equity loan back the house will have to be valued and a solicitor will need to be involved. So although interest free... you will have minimum costs of around 1k and thats if the house price stays the same...
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