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    • spriggsy
    • By spriggsy 7th Feb 18, 2:09 PM
    • 33Posts
    • 4Thanks
    spriggsy
    Help to Buy equity loan and the 'up to 20%'
    • #1
    • 7th Feb 18, 2:09 PM
    Help to Buy equity loan and the 'up to 20%' 7th Feb 18 at 2:09 PM
    I've looked everywhere and can't seem to find the answer, but what I do keep reading is that with a Help to Buy equity loan the government will lend you 'up to 20%'.

    Does that mean we could borrow 5%, 10%, 15% if we wanted to or are we borrowed what we are given?

    Ideally we would want to borrow as little as possible from the HTB part to be able to a) pay it off sooner and b) reduce the amount of deposit we have to put down initially, so something like 5% from the equity loan and 5% of our deposit to make up a 90% LTV purchase.

    Anyone know if that's possible?
Page 1
    • Lokolo
    • By Lokolo 7th Feb 18, 2:12 PM
    • 19,991 Posts
    • 15,120 Thanks
    Lokolo
    • #2
    • 7th Feb 18, 2:12 PM
    • #2
    • 7th Feb 18, 2:12 PM
    Question I have is why would you want to?

    I get you only want to borrow 5% on the equity loan but

    a) You get cheaper mortgages rates at a lower LTV, so a 90% LTV rate will be a lot higher than a 75% rate
    b) Its interest free for 5 years. So rather than pay mortgage interest on 15% of it (as you say you only want 5%), you can get it interest free. Pay it back after 5 years.
    • Crashy Time
    • By Crashy Time 7th Feb 18, 2:57 PM
    • 6,124 Posts
    • 2,359 Thanks
    Crashy Time
    • #3
    • 7th Feb 18, 2:57 PM
    • #3
    • 7th Feb 18, 2:57 PM
    With bond market/stock market wobbles and PTB intending to hike interest rates, plus people no longer being allowed to put estate agent and tax bills on the credit cards any more I would be careful how much you borrow in this environment.....actually surprised that HTB is still running TBH..


    http://www.propertyindustryeye.com/dramatic-slump-in-buy-to-let-lending-blamed-on-government-intervention/
    • kingstreet
    • By kingstreet 7th Feb 18, 3:44 PM
    • 33,559 Posts
    • 18,196 Thanks
    kingstreet
    • #4
    • 7th Feb 18, 3:44 PM
    • #4
    • 7th Feb 18, 3:44 PM
    It's 10% min to 20% max in 1% increments.

    Be careful. There are very few products in the market with an LTV above 75%.

    Realistically, you should only go got an HTB loan of less than 20% of you have enough deposit to get an LTV of 75% or lower.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Crashy Time
    • By Crashy Time 7th Feb 18, 5:42 PM
    • 6,124 Posts
    • 2,359 Thanks
    Crashy Time
    • #5
    • 7th Feb 18, 5:42 PM
    • #5
    • 7th Feb 18, 5:42 PM
    It's 10% min to 20% max in 1% increments.

    Be careful. There are very few products in the market with an LTV above 75%.

    Realistically, you should only go got an HTB loan of less than 20% of you have enough deposit to get an LTV of 75% or lower.
    Originally posted by kingstreet

    Explains why there are so many threads on here about struggling to sell I suppose?
    • hammy1988
    • By hammy1988 7th Feb 18, 5:44 PM
    • 135 Posts
    • 88 Thanks
    hammy1988
    • #6
    • 7th Feb 18, 5:44 PM
    • #6
    • 7th Feb 18, 5:44 PM
    As others have said, surely it would make sense to take the HTB... You'll grab yourself a decent mortgage with a much better loan to value.
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