To have doubts about the help to buy scheme?

[livupq]

I’ve been looking at this in London. An equity loan up to 40% of a properties value that is interest free for 5 years but then you can only pay back in increments of 10% of the property value.

Has anyone done this? Can you share your experiences?

Not done it myself but lots of people do. Best bet I’d find a broker & have a conversation about your financial situation & what your payments would be looking like 10 years from now.

I've known a few people who have done it. They managed to get on the housing ladder, sell within two years and have enough to get somewhere else which they owned fully.

We used it outside of London. Sold up long before five years was up

Not in London but just outside (so 20% loan). We are only a year in so can’t comment on the repaying element. However, it allowed us to buy far sooner with just 5% deposit. It would’ve taken us so much longer just to save 10%. Our mortgage interest rate is very good and we now pay less in mortgage repayments per month than we did in rent (for a house twice as big). We actually could have borrowed enough for a 95% mortgage but the repayments would have been huge.

We are hoping that when the 5yrs is up we will just remortgage for the full outstanding amount. This should be doable as we will have paid for some of the house already in repayments plus it should go up in value at least a bit over the years. Plus we were eligible for that amount of mortgage anyway so if our circumstances don’t change we should still be in 4 years time. I’d be more worried if I felt we had to pay interest on the equity loan at the end as this is quite high and finding 10% of the value to repay without being able to add it to a remortgage would be impossible. Plus in 4years time I will no longer be paying the bulk of my salary in childcare as kids at school so will be able to afford increased repayments!

We did it! Has been great and currently our mortgage is the same as our rent was. We haven't looked at paying the loan back as it's not been 2 years yet but we absolutely don't regret it!!

Thank you for the feedback! It sounds pretty positive if you sell before the 5 years are up.

yeah I did it when my ex left and I had to sell the family home - worked well for us - sold after 4 years

only down side is the mortgage - you can't take breaks as you aren't classed as 'owning 100%' of the property - even though you do - but that's a minor issue

Read the small print my brother done it and I can’t remeber what the issue was but he said that there was a lot more to it than he first thought.