Remortgaging Help to Buy

Lagamorph · 20 April 2018 at 7:38PM

So I bought a house using Help to Buy in December 2013 so my 5 year interest free period is ending in December of this year. However my current mortgage fixed interest (With Halifax) is ending 31st July this year. The full remaining term of the mortgage at that point will be 30 years and 6 months.

I'm thinking of remortgaging shortly, but including the Help to Buy balance in the remortgage to pay it all off before it starts earning interest. Has anybody got any experience with doing this that can share how easy it is to do?
As I understand it my choice of lenders may be somewhat limited due to redeeming the Help to Buy loan. From a quick calculation I believe my LTV will be just under 85% if I add on the Help to Buy amount to the current outstanding on the mortgage.

Is now a good time to do this? Or am I best getting another 2 year fixed interest deal and paying 2 years of interest on the Help to Buy loan before redeeming it? From what I understand the interest in the first year is relatively low but after that it shoots up to around 6-7%.

kingstreet · 20 April 2018 at 7:43PM

You are wrong about the future rates.

Assuming inflation of 5%, year seven is 1.86%, year eight 1.97% and so on...

See your original personal worked example or the HTB Buyer's Guide here;-

https://www.helptobuy.gov.uk/wp-content/uploads/Help-to-Buy-Buyers-Guide-Feb-2018-FINAL.pdf

Page 20 refers...

You can look at;-

a product transfer = a new product from your existing lender
or
a remortgage = a new mortgage with a new lender leaving the HTB loan in place
or
a remortgage = a new mortgage with a new lender replacing the HTB equity loan.

The latter two will be subject to status and affordability where the product transfer is normally free of further checks.

Here is a link to the post-sales HTB Agent which manages the repayment of the HTB equity loan etc;-

https://www.myfirsthome.org.uk/

click 'I want to' for details of the different options.

Lagamorph · 20 April 2018 at 8:30PM

Ahh right, I think I misunderstood.
I was under the impression that it was the 1.75% + 1% + RPI, so basically it would become 7.75% in year 7
I can see now that it actually means that the increase is RPI + 1% OF the 1.75% (Or whatever value RPI is at that point), rather than all of them added together to make one big percentage.

I was actually planning on going to the Darlington Building Society where I have an account as they offer a free session with an independent financial adviser too, so was going to see what they suggested.

Will also be making an appointment with Halifax soon as well so will see what products they might offer in assisting with the process.

Lagamorph · 21 May 2018 at 11:28AM

Boy, when you take out these Help to Buy mortgages they don't make it clear how much of a faff on it is to actually pay it off.

First you have to get an independent valuation done, but it cannot be an estate agent it has to be an independent chartered surveyor at your own expense.
Then you have to pay an independent solicitor to do the legal conveyancing.
Then there's a £200 redemption fee that you have to pay to the HTB lender.

You're close to a grand out of pocket just to pay off the Help to Buy, and that's before you pay back both the initial loan and the additional from any increase in your property price.
I was put under the impression at the time of taking out the mortgage that everything was handled through the actual mortgage lender and that was why only certain lenders participated in the scheme. I always thought it was just a case of telling the lender you want to pay it off and they take care of the rest.

Remortgaging Help to Buy

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