Services

‘Help To Buy’ Remortgaging

Many homeowners used the governments ‘Help to Buy’ scheme to purchase a new build property and probably had a five-year fixed or tracker mortgage.

The information here is designed to give you some guidance on what to do when your mortgage deal is coming to the end of the five-year period.

These details are what you need to know about a ‘Help to Buy’ remortgage and don’t worry we can help you through the process.

BlueJay Planning can assist you with:

When can I remortgage my 'Help to Buy' mortgage?

You can start to look at remortgaging when you are into the last 6 months of your current mortgage deal. So, for example if you are on a 5-year fixed rate then around 4 and half years in we can start to look at your options.

It’s important that you start planning in this final 6 months of your deal. Once your deal finishes you will move on to the lenders Standard Variable Rate (SVR) which could be more expensive than your current monthly mortgage repayment.

Where do I start?

Well, you need to know your numbers first. You will need a Royal Institute of Chartered Surveyors (RICS) valuation report. This will provide a valuation to your property and the report is usually valid for 3 months. You will need to pay for this survey. We can arrange the survey for you.

Once the property has been valued, we can calculate how much you need to pay back to the government.

Remember the amount you payback to the government is 20% of the current value and not what you paid for the property.

Want to know more?

As ‘Help To Buy’ Remortgaging Specialists, we can help you through the entire process.

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IMPORTANT: We can only assist with ‘Help To Buy’ Remortgaging. The original ‘Help To Buy’ scheme closed for any new applications on the 31st October 2022.

How does Loan to Value Work?

In a property with a help to buy loan usually you would have had a mortgage for 75%, had an interest free loan of 20% off the help to buy scheme for 5 years and then you put a 5% deposit in.

The help to buy share goes on the current value of the property and not on the value when you purchased it. So, if house prices go up then so does the value of the help to buy share. Please note different limits apply in London.

How do I find the right remortgage deal?

This is our speciality. We have access to a large panel of lenders, some you will have heard of and some you won’t, but they all offer regulated products and in some cases I have access to deals which are not available on the high street.

Our job is to review your circumstances and match that to the right lender. In some cases, your existing lender may offer you a good deal to stay with them but we are able to research our panel and see if there is a better deal for you.

What happens if I move to a new lender?

Should our recommendation be to move to a new lender then a solicitor will manage the transfer of funds between the lenders and register the new lender with Land Registry.

They will also put in place a Deed of Postponement to the Help to Buy Scheme to register the new lender. 

We can help arrange the solicitor for you but please bear in mind there will be charges for this part of the process.

You will also have to complete an application form to the scheme administrator to approve the new lender.

Do I have to pay back the 'Help to Buy' loan when I remortgage?

In a nutshell no, you don’t have to. Our job is to review your circumstances and see if it is possible.

We review your circumstances and see if you can afford to remortgage your existing mortgage to a new deal and pay the Help to Buy share back.

If you are not in position to pay the Help to Buy share back, then you will have monthly mortgage payment and a monthly interest payment for the Help to Buy part of your loan. The loan was only interest free for the first 5 years.

When can I pay the equity loan back?

You can pay the Help to Buy loan back at any time. This could be done when you remortgage, so if you have the affordability, you can use some of the equity in the property to pay the government back. Just remember your mortgage will increase and so will your repayments if you chose this option.

When you sell the property at this point 20% of the equity would be paid back. This might reduce the amount of deposit you have if you were looking at buying another home.

You can also look at making lump sum payments so if you have savings these can be used to reduce the debt. This can be known as staircasing, and the minimum is normally 10%.

How much does it cost?

There are some administration fees to pay if you remortgage to a new lender to the help to buy scheme provider as they need to amend your account with the new lender details. Your solicitor will be able to help with this part of the process.

If you wish to pay the help to buy loan off completely again there will be an administration fee. Please check on the government website for correct fees.

Depending on the lender and the mortgage recommended there maybe a fee, as part of our service we would discuss these fees with you. Usually with these fees you can add them to the loan or pay up front. We would help you understand the fees and what is the best options.

What if I can’t repay the 'Help to Buy' Loan?

You have the option here to remortgage with your existing lender which is probably the most straight forward option. Alternatively, there maybe a lender with a better rate which we could transfer you to.

Our advice would provide you with all the options and we talk through which one was best for you.

What do I have to do about my life & critical illness insurance?

As part of the process, we would review any policies you have to make sure you have enough cover to pay the mortgage off should anything bad happen.

As your lending amount may have changed due to the remortgage we would also recommend you change you life insurance to make sure it provides enough cover to clear the mortgage debt.

You can then decide if you wish to change the type of cover you have.

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