12th August 2023
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Navigating your Help to Buy loan repayment: A comprehensive guide

Taking the leap into homeownership can be a thrilling yet daunting journey. Thankfully, with schemes like Help to Buy, achieving that dream has become more attainable for many. However, the journey doesn’t end once you’ve got the keys; repaying your Help to Buy loan is a crucial next step. Higham Critchley Barrows is here to guide you through this process.

What is a Help to Buy loan?

Introduced by the UK government, the Help to Buy Equity Loan Scheme offered a leg-up to first-time home buyers and existing homeowners looking to buy a new-build property. The government lends up to 20% (or up to 40% in London) of the cost of your newly built home, meaning you needed only a 5% cash deposit and a 75% mortgage to make up the rest.

Repaying your Help to Buy loan: What you need to know

After the initial five-year interest-free period, you will start to pay interest on the loan, so it’s essential to plan for repayment. Here’s what you need to know:

  1. The five-year mark: For the first five years, the Help to Buy loan is interest-free. From the sixth year, you’ll pay monthly interest on top of your mortgage payment.
  2. Repayment amount: The loan repayment is based on the property’s market value at the time of repayment, not the price you initially paid.
  3. Early repayment: You have the option to repay all or part of the equity loan at any time. A partial repayment is known as ‘staircasing’, reducing the future charges on the loan.
  4. Selling your property: If you sell your property, you’ll need to repay the loan in full. The repayment will be a percentage of the total sale price or the market value, whichever is higher.

How Higham Critchley Barrows can assist

At Higham Critchley Barrows, we have a team of dedicated advisors who can guide you through your Help to Buy loan repayment process.

Here’s how we can assist:

  1. Professional advice: We offer personalised advice tailored to your financial situation, helping you make an informed decision about repaying your Help to Buy loan.
  2. Understanding costs: We’ll help you understand all costs involved in repaying your loan, ensuring there are no surprises along the way.
  3. Future planning: We can help you plan for future financial commitments and manage your financial health in the long run.
  4. Help with staircasing: If you decide to repay part of your loan, our advisors can guide you through the staircasing process, helping you reduce the future cost of your loan.

Final thoughts

Repaying your Help to Buy loan may seem like a complex process, but with professional advice from Higham Critchley Barrows, it doesn’t have to be. With our guidance, you can navigate your repayment journey confidently, ensuring financial stability as you enjoy the comfort of your own home.

For expert help with your Help to Buy loan repayment or other financial advice, don’t hesitate to contact Higham Critchley Barrows today. We’re ready to guide you every step of the way on your homeownership journey.


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