Expert Advice on Remortgaging your Help to Buy Equity Loan

Preparing for the end of your interest-free period on your Help to Buy Equity Loan is crucial for managing your finances and maintaining ownership of your home.

When the initial 5-year interest free period ends, you will have to start making interest payments on the percentage of your home that is owned by the help to buy scheme, although, you will not gain any additional equity share in the property by doing so.

Whilst the year 6 rate of 1.75% may be lower than current mortgage rates, it is important to understand that from year 7 onwards the situation may look very different.

• Interest charged from year 7 onwards is at 2% above inflation, which at current rates could have a dramatic impact on your finances.
• There exists the potential for your home to be repossessed if you are unable to maintain the interest payments due on the help to buy equity loan.
• As the loan isn't for a fixed amount, rather it is linked to the value of your property, increasing house prices can mean early re-financing is more cost-effective overall, even if at a higher rate initially.
• Refinancing allows you to repay towards the capital, as well as interest, and gain an 100% equity share of your property.
• If you are planning to move home, your help to buy equity loan is required to be paid in full. The potential impact of this on the affordability of your next house purchase needs to be considered.

Therefore, it's never too early to start planning and considering important factors such as:

• The impact of interest repayments on your budget.
• The current value of your property and the amount you are required to repay.
• Your longer-term plans, for example if you intend to remain in the property or move home.
• The different refinancing options available for you to consider.

This isn't something you need to do alone; our expert mortgage advisers are here to help.

Whatever stage in your help to buy equity loan you are at, we will put together a comprehensive Mortgage Capacity Report providing in-depth insights into your current financial position, provide bespoke projections based on market forecasts and advice on which routes may be the most appropriate for you.

Where re-financing is desirable, we will then:

• Search the whole of market to identify the best rates and lenders available.
• Instruct a RICS Valuation and conveyancing on your behalf from our panel of approved providers.
• Complete and submit your application for approval to the help to Buy administrators and support you with any follow up queries they may have.