Can someone answer a (possibly very stupid) question about mortgages?

[caggie3]

I'm not wording it right to get a result on Google

When we borrowed we used help to buy for 20% of value, put in 5% deposit. So LTV was 75%

When we re-mortgage, after 5 years, we are adding help to buy. Will this make our LTV 95%?

A house the exact same as ours (new build estate so I mean identical) has sold for £90k more than we all paid. So assuming mine is now valued as more, does that make my LTV lower?

And does LTV take into account what we've already paid into equity?

Confused!

You are essentially starting a mortgage again with new figures. Your loan to value will be the amount to borrow divided by the current value x 100.

Yes it does lower your LTV if house has increased in value from what you have paid e.g. a house valued at 300k which you have a 150k mortgage on would have a 50% LTV

I see what you mean but the earlier poster is correct.
Say the house cost £100. You spent £5, and borrowed the remaining £95 from two other people - the mortgage lender and the help to buy scheme.
Now - this is an entirely new deal.
The house is valued - let's say again (for easy maths) it is worth £100 - but now you may be able to pay more than 5% (or £5). It doesn't matter how much the house is worth, it is what you can afford to put down as a PROPORTION of the overall cost that makes your LTV.

Does that make sense? Don't apologise for not understanding, millions of people don't - you are sensible to ask.

Example:

House value £200k, £40k HTB, £10k deposit, £150k loan so:
LTV is (£150k / £200k) * 100 = 75%

Five years later:

House value £300k, £80k HTB, £20k capital repaid so now only owe £150k - £20k = £130k so you will be borrowing £130k + £80k:
LTV is (£130k + £80k / £150k) * 100 = 70%

Loan To Value is based on house value, not house price paid.
If I only owe £10k on a house that is now valued at £100k my LTV is 10%, it is irrelevant what price I paid for it 20 years ago for example.

Is the 20% Help to buy costed at 2018 price or 2023 price?

Adding in the help to buy will raise your LTV.
Rising house costs and mortgage payments will reduct your LTV.

Without more numbers from you, noone will be able to work it out for you - but don't feel you have to share all your finances on a public forum unless you are comfortable doing so.

You will have paid some equity off in the 5 years that you’ve owned, how much depends on your deal and if you’ve overpaid etc but you won’t be going up to 95% LTV because the repayments will have brought some of it down. As others have said they will value your house as it stands now, your new deposit is your old deposit plus equity, you take a mortgage on the rest and they work out the % based on that.

Your house will likely be worth more now but given the market, but it will have dropped slightly from the £90,000 your neighbours got. I would definitely argue that with the valuers. You want a market dip because you pay 25% of the house value. So if you paid £200,000 for the house 5 years ago your HTB would be £40,000. If the property has increased by £90,000 your loan to repay is £58,000 but if it’s only increased by £70,000 that’s going to £54,000. So this is definitely worth you watching what is happening to house prices in your local area - watch rightmove for a bit to see what properties are going on at, how much they’re reducing by and how long they are hanging around, that’ll give you an indication of the market in your area and if you can argue the value is lower.

You need to find out what your house is worth and what you owe on the mortgage (and HTB), that will give you your LTV. Remember you don't have to pay off HTB at the 5 year point, with interest rates so high currently and house prices not going very far you could consider delaying a couple of years, depends how comfortable you are with the new mortgage payment, if your LTV was as high as 95% for example (I doubt it though) you likely wouldn't want that rate.