Anyone else not know the fuckety fuck they're going to pay back help to buy?

[cheezits]

Somewhat naively used help to buy equity loan for 20% of value of our £245k home

Planned to remortgage in 5 years - interest rates have poo pooed that

House value has gone up to £330k ish - no chance we can save up 20% or even 10% of that off

On to interest payments we go.. but only a few years until they become unaffordable.

Fucked! Fuckety fucked!

Am I alone in this poor financial choice?

I don't really understand the help to buy equity loan, does it mean you have to pay back 20% of what your house is now valued at? Rather than what you borrowed?

Yep. We didn't really see it rising loads, it's a new build which people said don't gain as much and house prices were already so high.. we were wrong!

Can you not remortgage it in ? That's what we are going to do I think

Jeees what a con! I bet they were smiling when you signed that agreement! It's basically an equity release scheme in advance isn't it?

Whose wisdom did you rely on when making the course of action.

Joe public
Mortgage people
Banks
Etc

We knew there was a chance it would rise but we didn't think it would as much as it has. To remortgage it in now makes our mortgage an eye watering amount per month. So much regret.

I guess a consolation is if you couldn't have bought a home without one? You'd still be renting rather than paying off (eventually!) a mortgage.

Is there an option to sell?

Oh OP I would feel conned

Will the bank lend you the amount you need to remortgage it in? If so then I’d do that, they payments will be high but the bank seems it affordable and you’d have more security then the interest payments rising more than you can afford later.

We want to stay here forever 😭 I'd be devastated if we had to sell.

We bought with help to buy in 2013 and sold 5 years later paid it back and took the equity we had to put down 10% on our next house

If you sold what would your options look like?

I do feel for you though I don't envy your position, the market was more stable and our house only rose by 10k in those 5 years so we pretty much paid back what we had and 20% of 10k and as our mortgage rate had been so low we had 30k equity over and above paying back the h2b

It's been a massively unfortunate economic turnaround for your cohort of help to buy 😔

Could you add to mortgage and extend the term to maximum to get the repayments down?

House prices are falling in lots of places, do you think it might go back down in the next year or so? Judging by the mortgage rates, banks seem to be expecting rates to fall in the next three years so hopefully there'll come a time when prices have fallen and rates have come down a little and you might be able to sort it out then 🤞

We have HTB on a £300k house, now worth £380k. Our 5 year fix came to an end and beginning of this year and went up from £800 to £1100. We pay about £80 a month back on the HTB loan. If you’re planning to stay, then is it too much of a financial stretch for you to do that? You don’t have to pay them back in full until you sell?

Is that repaying equity of H2b or the interest?

I bought a flat in a similar deal in 2008 - not HTB but a 20% developer loan. I paid £150k on a flat they valued at £200k. Five years later my fixed rate came up and the flat was valued at £250k, and my mortgage was about £140k. I remortgaged for £177.5k to pay off the loan and the flat was mine. Is this possible for you?

Don’t pay it off surely?

Isnt the interest rate like 1.75% and rises soooo slowly. It’ll be less than mortgage rates for a LONG time. Just pay the interest.

Yep, I don't think it will be wise for us to consume our H2B with an increased mortgage currently. We will probably pay the interest on it until a time when interest rates are lower and would make a higher mortgage the better option.

It is our 2nd H2B, we paid off the first when we sold the house. We're philosophical about it. We would not have been able to get on the property ladder without it and would not have been able to upsize to allow DS and DD their own rooms as they got older.

Our plan is to downsize once the DCs start moving out.

Interest rate is 1 75 in year one them after that it rises in line with consumer price index +2%

This could be 8% looking at current figures

**year 1 I mean year 6

First year after the 5 year period to clarify what I meant!

Literally everyone makes this mistake. I’m surprised Martin Lewis doesn’t have it tattooed on himself.

It’s 2% + CPI + 1.75 (year 6).

Which is terribly worded (from gov/mse).

Reality = 2% + CPI * 1.75
1.75 * 1.1 = 1.92%
then if inflation was 8% (which it won’t be)
1.92* 1.1 = 2.11%
etc

aka sweet fuck all. It was created in a time of low rates and is now ridiculous.

The govt basically thought mortgage rates would stay below below 2-3% forever.

Now you have a situation where people cannot move because they can’t remortgage to pay the equity off (which you have to do somehow). Housebuilders lucked out. They aren’t smart enough to pretend they knew this would be the outcome. People trapped in new builds. The dream.

Do you know anyone who has paid it back recently? We're just paying the interest for now but a few friends have remortgaged to add in the cost. They had to have the house valued by an approved surveyor but the value given hasn't been as much as the market value. One example is a valuation of 400k but similar houses are up for sale for 480k. Still an increase but not as much as feared.

Interest rates are set to go down next year. So it wont be this dire forever. They might not go down to the very very low rates they were at before last year, but they should go down significantly in the next 2/3 years