Help to Buy - how can I afford to pay back the bloody thing!

[Megang4]

Hi,
just wondering if there are others who have paid back their help to buy without selling the property.
we live in a very uniquely built new build (it’s built with a court yard and other things) so it will probably be worth good money in the near future. We really don’t want to sell it but would like to move to a bigger place in the next 2 years or so. We have stupidly remortgaged last year so tied into a new deal.

how do we pay back the HTB loan before the 5 year mark? Am I unreasonable to think people aren’t actually saving up £70k plus and paying it back to the government? (We got 50k from the government but the property is worth more now- I calculated I would pay back about 70k right now)

thanks for reading this far

Most people time their remortgage to coincide with the five years, or they repay early by remortgaging.

You can of course keep the loan and pay the interest charge until you can buy out the HtB loan at a later date - can you afford to do that?

Why do you have to pay it back by 5yrs? Why not just follow the normal plan?

If I’ve understood it correctly, it doesn’t all have to be paid back at the end of the 5 year term. It’s just at that point it begins to accrue interest and they expect that you make a start on paying it back. I think you can start to pay it in “staged payments” which are essentially lump sums incrementally, but you would obviously be paying more than the original £70k you’re now expecting to pay, as the interest will begin to add on too. Most people seem to time their mortgage renewal to coincide with when the interest free period is up (5 years) and then remortgage for the full balance of the loan and pay it all off in one go. It could be worth having a conversation with your bank to see whether they can do anything to help. If not, a financial advisor will probably know the most savviest methods to pay it off without it costing you the Earth in interest too.

@SavingsThreads because I want to avoid paying the extra interest

We have just paid ours back. Our fixed term ended at the end of the interest free period on the help to buy. We remortgaged to pay the loan off. The extra money on the mortgage was slightly more than what we would of paid on just the interest and keeping our mortage the same. We were advised not to do in stages if you can afford not too as you’d have to pay twice for the arrangement of the mortgages and the survey on the property. Plus the longer you leave the your house price increases and because of that so does your loan… we’ve now fixed again for 5 years just before interest rates went up.

its best to do it as soon as you can afford to. I would go to a mortage advisor to check your options

What a cunning way for the government to profit from their interventions in propping up the housing prices. All in the name of 'helping' first time buyers. I'm surprised they're dropping it!

But it's a free interest-free loan. Of course they need to incentivise people to pay it back.

@Doorhandleghost right I understand you.. I think that’s what I’ll do then. Wait till the 5 years is almost up then pay back the loan. My remortgage is due roughly the same time as the HTB interest free runs out. So I guess I will remortgage then

Yes. We were lucky that our house hadn’t increased a lot in price so the loan to house value was minimal on the increase. Hence why it’s good to do it as soon as possible. I def reccomend an independent mortgage advisor and to start the process 6 months before your fixed deal is up. There’s lots of paperwork and we had to chase a few things from the help to buy people. The surveyor needs to be registered with a specific body. Our mortgage adviser reccomend someone to us. They have all the right contacts.

it’s nice knowing we now own all our home but equally a bit annoying we now have a bigger mortage but that’s the price you pay. I think other people would sell up and pay the loan off that way. Seeing as more of a stepping stone once the 5 years are up.