Help to buy

[Chicken999]

Hi. We are looking for remortgage early as worried about rising rates. There is a charge for this but we are happy and able to pay it. My question is we want to take additional borrowing to pay off the help to buy loan. Would we be able to borrow the extra money and leave it in the bank for a couple of months while we arrange the help to buy stuff or would the bank expect the help to buy to be paid at the point of borrowing. Hopefully that makes sense. I don't know how else to word it 🙈

I'm not sure this would work if your remortgage was on the basis of an increase in your share of the value of the property. Ie your share is not worth more until the loan is paid so the banks security would be insufficient.

Unless you have a large amount of equity already which I am guessing is unlikely if used help to buy a few years ago unless you have overpaid the original mortgage or paid off a large lump sum.

Thanks for your reply. We have roughly 120k equity in the property

How much is 20% of the value of your property (assuming you took a 20% equity loan) and what percentage of equity will be left after you paid the loan back? You may not get a competitive interest rate if you go back to a high LTV and might be better off paying 1.7% on the equity loan for now (until that goes up).

@Chicken999 you need to look at the equity in relation to the value of the property and how much of it you can use as security. Until the loan is paid off you are only entitled to 80% of its value. If the 120k is the difference between the value of the house and the mortgage then this will include the help to buy loan and does not all 'belong' to you. However if 120k is the difference between your 80% and your mortgage and your loan is less than 120k then it might be doable.