The secret to repaying your Help to Buy loan

[@hodsontony121]

Extremely helpful and well explained. Looking at early repayment options for my daughter with support from Bank of Dad! Thanks for sharing!

[@mortgageadvice.vantage]

You're very welcome! Happy to go through it all with your daughter, just get in touch on the website www.vantage-mortgages.co.uk

[@RRedmondiy43]

Can you talk through converting a HTB into a BTL?

[@mortgageadvice.vantage]

Yes I will put it on the list! Feel free to get in touch in the mean time for any questions!

[@robertlittlejohn7288]

I’m currently looking at doing a rear extension. I have help to buy, 6 years in. I need to get the house valuation before the extension. My current mortgage is fixed until 2026 at 2.16 ish (don’t want to remortgage on that) Can we do a further advance? Can you do a video on this?

[@mortgageadvice.vantage]

Hi, yes I will try to do on eon that as soon as I can! For now though you could certainly look at a further advance or second charge. However, if you do that and increase the value of your home you will pay more back to HTB so it is best to repay them before you do anything!

[@fellanzavisha9525]

Hi Adam, I purchased my property on the HTB scheme. My property has decreased in value by £40k, what happens to my repayment. Do I pay my original loan, or 40% of the current value as it’s decreased.

[@mortgageadvice.vantage]

Hi, This is where it is kind of in your favour! You still pay back the 40% of the current value so if it has gone down then you repay less. If you need to re-mortgage to do that though, depending on how much equity you have we may struggle to get the full amount by increasing the mortgage.

[@PoetryFix]

Hello, I remember seeing something about not being able to “buy back” 100% of the 20% and that the maximum is 95% of the original 20%, meaning govt retains a 5% ownership (which the owner pays interest on) until the owner sells. Do you know if this is still the case?

[@50037]

Am I right in saying after 5 years the interest rate is 1.75% plus RPI which in January was 13.1%?

[@mortgageadvice.vantage]

Hi, not quite, it starts at that 1.75% but then goes up each year by the RPI so year one isn't too bad but it will soon go up after a few years nowadays! Best to get it paid off asap!

[@joveworth89]

which month's RPI figure is the % increased by?

[@rajarakeshreddyallam6430]

Is it worth to pay in to isa to max out tax breaks, instead of paying down help to buy? In the long run,equities outperform realestate?

[@mortgageadvice.vantage]

Hi, probably not something I can really give advice on but I guess you just need to balance how much return you will get vs how much your HTB loan is increasing and how much the interest rate on it is going up by!

[@Jaskiwi99]

Hi Adam, me and my boyfriend has a property which cost £400k we did £160k HTB, £220k mortgage loan and £20k deposit. We are now two years in and the mortgage loan is around £212k, however we just got our property valued and it has decreased from £400k to £360k. Does that mean now I can remortage for £356k (£160k-£16k+£212k)? Our mortgage is due to expire and we want to remortgage but our lender keeps saying we need additional borrowing?

[@mortgageadvice.vantage]

Hi, yes in theory you are right with your figures of £356k that will get HTB paid off. The problem though is your new loan to value. If your house is worth £360k you are nearly at 100% borrowing which you can't do. You could move to a new lender and hope they will value you at more like £395k which would give you 90% loan to value but obviously that is quite a big difference!

[@jendrizzyy]

Amazing thank you

[@simonemorgillo9987]

Adam, thank you for the great content. Taking into consideration the high mortgage rates and the fact that house prices are more likely to reduce than increase in the short term, does it really make sense to add the HTB loan to a mortgage? If the HTB interest is fixed at 1.75% that’s a heck of a lot better than the ~6% mortgage rates. Does it make sense to hold off for a couple of years given the current economic conditions whilst putting money aside that would have otherwise been spent paying interest?

[@mortgageadvice.vantage]

Yes an interesting discussion I have been having lately! Personally I probably still would. House prices aren't exactly crashing and you never know when they may go up again. Rates are high but coming down too. it depends though, I wouldn't finish a fixed rate early to do it and pay a penalty, I would certainly wait in that case. Also depends on age and how long you have to repay the mortgage, if that is a factor it may be better sooner. The honest answer is I don't really know! We don't know what the next couple of years holds so it is a really hard decision! I would just always prefer to get rid of HTB asap!

[@simonemorgillo9987]

Thanks for the response. I get it’s not a one size fits all, it’s good to hear other opinions.

[@mortgageadvice.vantage]

Feel free to book in for a chat about it, no obligation of course! calendly.com/adam-vantage/new-appointment-youtube

[@TheGingernut79]

Adam me and my girlfriend are selling our help to buy which we have lived in for Currently 4 years! We lent £38000 on the equity scheme When we sell am I right in saying they will take this back on the sale !?and we will have to pay them 20% extra on top of what we will make in profit on the property ?

[@mortgageadvice.vantage]

Hi Stuart, yes you are right really, you will repay 20% of the sale price to HTB so that will be what you borrowed plus 20% of any extra. Technically I believe you will still have to get an independent valuation for HTB but realistically it will just say it is the same as your sale price. If you would like any more specific help please feel free to book a free call with us!

[@jakegeng22]

Adding the extra 20% and with new interest rates, our monthly payment will double. We are on a 1.84% and borrowed 52,000 from the government. Our house is worth 280-290k.

[@mortgageadvice.vantage]

Yeah that's a tough one right now isn't it. it depends how long you have been in the house and when your mortgage is due. you could leave it as it is for another couple of years and just take a new fixed rate for 2 years. We can then hope that in 2 years it is a bit lower and all a bit easier!