The Help to Buy Equity Loan Scheme – should you re-mortgage?

The free interest period has now ended if you took this out when it started in 2013.  Now you can:

Do a normal re-mortgage and keep the Equity Loan alongside it or

Re-mortgage and get rid of some or all of the Equity Loan, however, this does mean you could end up with a larger mortgage but you won’t be tied into the original loan.

*Be aware* you need to make sure you are in a strong enough financial position to be able to take on the extra mortgage payment without running the risk of defaulting and potentially losing your home.

If you don’t buy yourself out of the Equity Loan, the government will still own a share of your house and will take their cut when you eventually sell taking the percentage amount you owe off the sale price of your house, so you risk paying more than you originally borrowed.

If you are interested in paying back the loan, you can either pay back the whole amount in one lump sum or smaller instalments, but you can only repay back a minimum of 10% of the property’s value.

Paying off the Equity Loan saves you money and:

a) If the property increases in value you won’t have to hand any of it over to the government.

b) You don’t have to worry about paying the interest after the five year anniversary of taking out the loan.

c) If you choose to re-mortgage further down the line, you will have access to a wider range of lenders with more mortgage deals.

We can simplify the re-mortgage process for you. Our service is completely free and you are under no obligation to commit to anything we find. If we source a deal you like then our pledge to you is that 25% of any fees we receive from the lender will be donated to a charity of your choice.