If you used Help to Buy to purchase your property, have you paid off the equity loan

7 replies

h2b · 04/12/2023 15:32

Name changed for this but a regular poster otherwise.
As the topic says. We bought out house using the H2B equity loan a few years ago and now we're considering remortgaging to pay off the equity loan. I wonder if it's worth doing or if we are better off keeping the equity loan and paying the monthly fee which I suppose is essentially interest only on the loan and then paying it off if or when we sell. We currently have no plans of moving. This may well be our forever home till maybe when the kids are all grown up and moved and we downsize.

OP posts:

EnterNowhere · 04/12/2023 15:36

I got advised that at the moment as mortgage rates are quite high, to just leave the loan for now. We will be reaching the 5 years in May and the payment is £63 a month, if that helps at all. Think it’s something like 1.5% interest whereas a mortgage would be higher.
not an expert at all but this is just what I was advised.

Stephisaur · 04/12/2023 15:39

We paid ours off because it made minimal difference to our mortgage payments to do so. This was a couple of years ago when interest rates were low.

We sold 2 years later, and the house had gone up £20k in value, so we did benefit there.

Paying it off was a headache paperwork wise (target aren't the fastest/most helpful) but I was glad not to have to deal with that while selling.

Really, I think it's better to pay it off as soon as you can afford to. I'd rather pay of 20% of £300k than 20% of £400k when your house value goes up!

Original poster

h2b · 04/12/2023 18:50

Stephisaur · 04/12/2023 15:39

We paid ours off because it made minimal difference to our mortgage payments to do so. This was a couple of years ago when interest rates were low.

We sold 2 years later, and the house had gone up £20k in value, so we did benefit there.

Paying it off was a headache paperwork wise (target aren't the fastest/most helpful) but I was glad not to have to deal with that while selling.

Really, I think it's better to pay it off as soon as you can afford to. I'd rather pay of 20% of £300k than 20% of £400k when your house value goes up!

This is what I was thinking but got into two minds because of how high the rates are like what the pp said.

OP posts:

Twiglets1 · 04/12/2023 20:22

I would think it’s better to pay off the equity loan while house prices are flat. I don’t claim to know much about H2B though or exactly how it works.

SuddenlyOld · 05/12/2023 21:00

Stephisaur · 04/12/2023 15:39

We paid ours off because it made minimal difference to our mortgage payments to do so. This was a couple of years ago when interest rates were low.

We sold 2 years later, and the house had gone up £20k in value, so we did benefit there.

Paying it off was a headache paperwork wise (target aren't the fastest/most helpful) but I was glad not to have to deal with that while selling.

Really, I think it's better to pay it off as soon as you can afford to. I'd rather pay of 20% of £300k than 20% of £400k when your house value goes up!

Exactly what we did. You want as low a valuation as possible so now would be a good time for that reason. Get a good mortgage advisor as they can recommend a valuer who is fair in their assessment (and IIRC they need to be registered with the scheme to be able to value your home). We paid it off as soon as we could and before the 5 years were up. We knew we wanted to move as soon as possible though.

girlbossmomma · 20/02/2024 13:03

@SuddenlyOld did you do an onward purchase at the same time as paying off HTB?

SuddenlyOld · 23/02/2024 20:25

girlbossmomma · 20/02/2024 13:03

@SuddenlyOld did you do an onward purchase at the same time as paying off HTB?

No we sold and moved 18 months after

Flip