Help to Buy Remortgage & Equity Loan Repayment Hub
If you bought your home using the Help to Buy Equity Loan, there will come a point where you start asking:
- Should I repay my Help to Buy equity loan?
- How do I repay my Help to Buy equity loan?
- Can I add the Help to Buy equity loan to my mortgage?
- Should I clear my equity loan in full or in part?
- What happens to my equity loan if my home has gone up in value?
- When is the right time to repay my Help to Buy equity loan?
This hub is designed to give you straight answers, in plain English, so you can make confident decisions about your next move.
At Thomas Honour Mortgage Services, we help homeowners across Brackley, Oxfordshire, Buckinghamshire and Northamptonshire remortgage to repay their Help to Buy equity loan and simplify the process.
How the Help to Buy Equity Loan works
The Help to Buy Equity Loan scheme was designed to help buyers purchase a new-build home with a small deposit, by allowing the government to lend up to 20% of the property value (40% in London). For the first five years, no interest is charged on this loan, although a small monthly management fee applies. From year six onwards, interest becomes payable and increases each year. The loan must be repaid in full when you sell the property, when your main mortgage ends, or after 25 years – whichever comes first
Why should I consider repaying my Help to Buy Equity Loan?
The longer you keep the equity loan, the more it could cost you, because:
- If your house value goes up, this increases how much you must repay.
- From year 6, you start to pay interest on the equity loan.
One of the biggest misunderstandings is:
The amount you repay is based on the current market value of your home at the time you choose to repay
So if you bought for £350,000 and took a 20% loan (£70,000), and your home is now worth £375,000, you no longer owe £70,000 – you owe £75,000, which is 20% of the current value.
That means the longer you leave it and the more your property grows in value, the more expensive it becomes to clear.
Can you add the Help to Buy equity loan to your mortgage?
In most cases, yes.
This is done by:
- Valuing the property using a RICS surveyor (in a format approved by Homes England)
- Applying for a new mortgage to:
- Repay your existing mortgage
- Repay the Help to Buy equity loan
- Cover any associated fees
- Completing both simultaneously, so the equity loan charge is removed from the title
Help to Buy Mortgage Lenders
Not all lenders assess Help to Buy remortgages in the same way.
We regularly see clients who:
- Were told by their bank they couldn’t borrow enough
- Ran an online calculator and assumed it wasn’t possible
- Considered delaying or selling as a result
But when assessed from the wider market by a broker that is experienced with Help to Buy remortgages, the outcome can be very different.
This is especially relevant if you have:
- Bonus or commission income
- Overtime
- Self-employed income
- Multiple sources of income
- Childcare costs or complex outgoings
Choosing the right lender can be the difference between clearing Help to Buy now or being forced to carry it for years longer than necessary.
Full repayment vs partial repayment (staircasing)
In some cases, a partial repayment of the Help to Buy equity loan can be a sensible alternative to clearing it in full.
This is known as staircasing and it allows you to repay the loan in chunks, rather than all at once. The process is similar to full repayment, but instead of redeeming the entire equity loan, you repay a minimum of 10% of your home’s current market value.
The key thing to understand is that, just like full repayment, partial repayment is based on the current value of your property, not what you originally paid for it. A RICS-qualified surveyor must first provide a formal valuation, and the amount you repay is calculated as a percentage of that figure.
The same steps apply as with the full redemption process and once a partial repayment has been made, your monthly equity loan interest payments reduce, because they are calculated on the remaining percentage of the equity loan.
There are, however, a few important restrictions:
- Repayments must be made as lump sums, not regular monthly amounts
- Each repayment must be at least 10% of the property’s current value
Whether partial or full repayment is the right option depends on your circumstances. Our team of experts specialise in Help-to-Buy remortgages and is here to guide you every step of the way.
When is the best time to apply for a Help to Buy Remortgage?
Important factors we always check:
- Are you tied to your current deal with early repayment charges?
- When does your current deal end?
- When do your Help to Buy interest payments start (from year 6)?
- Are rates moving in a way that makes earlier action sensible?
In many cases, the planning starts 4–6 months before your current deal ends, giving enough time for:
- Valuation
- Mortgage application
- Homes England authority to proceed
- Legal work
- Coordinated completion
You must always repay your Help to Buy equity loan if:
- The equity loan term ends (normally 25 years unless extended)
- You pay off your first charge repayment mortgage without replacing it
- You sell your home
- Help to Buy tells you to repay the equity loan (if you have not complied with its terms)
- You have breached the terms and conditions of your repayment mortgage
- You become bankrupt or enter into an Individual Voluntary Arrangement
Our Help to Buy Remortgage Service
When you work with us to remortgage and consolidate your Help to Buy equity loan, you are assigned a dedicated mortgage advisor who will work with you one-to-one throughout the entire process.
Rather than a generic approach, we create a bespoke plan based on your goals, timescales, income and future intentions, and guide you through to completion.
Your Help to Buy Remortgage journey typically looks like this:
1
The Initial Call
An initial conversation with your dedicated mortgage advisor to understand your plans, timescales, income structure and long-term objectives, and to map out the most sensible route to remortgaging and repaying your Help to Buy equity loan.
2
Expert Help to Buy Mortgage Advice
We will carefully assess your circumstances and identify the lender who is most suitable for your circumstances.
3
Access to our panel of Help to Buy Surveyors
We provide guidance on the RICS valuation process and access to our hand-picked panel of Help to Buy-experienced Royal Institution of Chartered Surveyors (RICS) who are familiar with the Homes England requirements, provide fair market values and are cost-efficient.
4
Access to our panel of Help to Buy Solicitors
We introduce you to our trusted solicitors who specialise in Help to Buy redemptions, and coordinate the process with Homes England to ensure the equity loan is repaid correctly and the charge is removed from your property.
5
Completion and paperwork
We support you with the application process through to completion, providing you with the necessary Help to Buy redemption application form and ensuring it is submitted correctly and on time.
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The Aim is Simple:
Clear guidance, one point of contact, and a carefully structured plan that makes repaying your Help to Buy equity loan as smooth and stress-free as possible.
Case Study
The Background
Adam & Olivia, are homeowners in Brackley. They purchased their new-build home on the Radstone Fields development, 5-years ago, using the Help to Buy equity loan scheme to get onto the property ladder.
They have a:
- £272,000 mortgage
- 20% Help to Buy equity loan
- Property that increased from £375,000 to £400,000 since it was purchased 5 years ago
- Their 5-year fixed rate is due to expire in a few months
- The Help to Buy interest payments become payable shortly
They approached their existing lender to explore borrowing additional funds to repay the equity loan, but were told they did not meet that lender’s affordability criteria.
On the back of this, they approached their current bank and were told the same thing, so they assumed clearing the equity loan wasn’t an option and resigned themselves to paying the monthly interest instead. They were also concerned that, if house prices continued to rise, the cost of repaying the equity loan would only increase and eventually feel out of reach.
What we did
That’s where we came in and saved the day!
- We searched lenders from the wider market, not just one or two banks
- We found a lender that used a more generous affordability model to lend them the required funds
We were able to:
- Complete a remortgage to a competitive rate
- Repay the Help to Buy equity loan by consolidating it onto their mortgage
- Assist with finding a RICS surveyor and arrange the Help to Buy valuation
- Instructed a Help to Buy experienced solicitor on their behalf
- Supported them in completing the Help to Buy redemption application paperwork
Frequently asked questions
This is a mandatory requirement and provides an independent valuation of your home based on the current market. Homes England requires a valuation from a qualifying Royal Institution of Chartered Surveyors (RICS) before they will issue authority to proceed.
Having a larger deposit is generally beneficial as it can increase your chances of securing a mortgage and potentially allow you to access more competitive interest rates. Additionally, a higher deposit may also reduce your monthly mortgage payments.
However, it’s important to note that the specific deposit amount needed will be determined by the lender’s affordability assessments, taking into account factors such as your credit history, income, and the overall affordability of the property you’re considering.
To ensure you get the most accurate and up-to-date information regarding deposit requirements, it is recommended to consult a qualified mortgage advisor. They will assess your individual circumstances and guide you through the process of determining the ideal deposit amount based on your unique circumstances.
Remember, while it’s crucial to consider the deposit amount, it’s equally important to evaluate other associated costs such as solicitor fees, stamp duty (if applicable), and ongoing expenses like mortgage protection and insurance premiums.
It depends on your personal circumstances. Our experienced advisor will provide you with advice tailored to your situation. But, if your property grows in value, the more expensive it becomes to clear.
Yes. Staircasing is allowed in 10% increments, subject to the standard redemption process.
Different lenders assess income differently, which is why advice from the wider market is important.
No, they are independent of each other. We help clients achieve the highest possible valuation in order to obtain the best rate for their mortgage and the lowest possible valuation for their Help to Buy redemption to reduce the amount they repay on their equity loan.
Firstly, we do not always recommend that you repay the equity loan as our advice is bespoke to your circumstances. But remember, the equity loan must be repaid within 25 years and as it equates to a percentage of your property value, if your property value increases, then so does the amount you owe on your equity loan.
That means the longer you leave it and the more your property grows in value, the more expensive it becomes to clear.
You’ll usually need to pay:
- A £200 administration fee to Homes England
- A RICS-accredited valuation (typically between £300-£450) to confirm your property’s current market value
- Legal fees payable to a conveyancer (typically between £1000-£1200)
- A mortgage broker fee
It’s also important to review your current mortgage deal carefully. If you’re still within the fixed period, an early repayment charge may apply.
We will always review the numbers carefully to ensure the timing is right and the overall move makes financial sense.
Why work with Thomas Honour Mortgage Services on your Help to Buy Remortgage?
At Thomas Honour Mortgage Services, we understand that remortgaging your Help-to-Buy property can be a daunting process. Our team of experts specialise in Help-to-Buy remortgages and is here to guide you every step of the way. We are dedicated to not only finding the most suitable mortgage deal for you, but also simplifying the equity loan redemption process.
We are a Brackley-based mortgage broker, working with clients across Oxfordshire, Buckinghamshire, Northamptonshire and London.
We regularly handle:
- Help to Buy remortgages to repay the equity loan in full
- Help to Buy remortgages to partially repay the equity loan
- Help to Buy remortgages without repaying the equity loan
Let Thomas Honour Mortgage Services be your trusted partner in securing the most suitable remortgage deal for your Help-to-Buy property. Contact us today and experience the difference our expertise can make!