Help to Buy Remortgage Advisors & Brokers in Milton Keynes

About the Help to Buy Equity Loan Scheme

The Help to Buy Equity Loan Scheme was launched by the government in 2013 and has since gone through a number of changes. In 2021, the scheme became exclusive to first-time buyers only, and now enforces regional price limits.

This means that buyers can only use the scheme to purchase a home costing no more than the specified property price cap in their region. This is to ensure that the scheme reaches the people who need it most.

The regional price caps are as follows:
Regional price caps:

• North East - £186,100
• North West - £224,400
• Yorkshire and the Humber - £228,100
• East Midlands - £261,900
• West Midlands - £255,600
• East of England - £407,400
• London - £600,000
• South East - £437,600
• South West - £349,000

In order to be eligible for the Help to Buy Equity Loan Scheme, you must tick the following boxes:

• You must be a first-time buyer
• You must be purchasing a new build from a registered Help to Buy builder
• You must be purchasing a new build costing no more than your regional price cap
• The new build must be the only property you own and your main residence

To use the scheme, you must put down a minimum 5% cash deposit on a new build property. As part of the scheme, you are then eligible for an equity loan (provided by Homes England) of up to 20% to make up the rest of your deposit. In London, this figure is 40% due to the higher house prices. The remaining 75% (or 55% in London) of your property purchase is funded by a personal mortgage.

Paying back the Help to Buy equity loan

You can pay off the equity loan at any point, paying either 50% or 100% of the outstanding equity loan sum, however when doing this it will usually incur a fee. In London where the Help to Buy loan is up to 40% of the purchase price, you are able to pay off 10% increments of the equity loan.

The government requires the loan to be paid off in a cash lump sum. This could be money gifted to you, inheritance, savings, a bonus or through remortgaging. A Help to Buy remortgage is the most common way to pay off the loan for most people, however the process is not as straightforward as with a general remortgage. Even finding the right lender can be more difficult, as not all lenders will accept remortgage applications to pay off the Help to Buy loan and those that do, have additional restrictions regarding the amount of equity that is in the property. 

This is where we can help. As specialists in Help to Buy mortgages and Help to Buy remortgages, we have access to the whole of the market and can hand hold you through every step of the process.

Your remortgaging options

Essentially, you have three options available to you to consider:

• Option one

Transfer your existing mortgage to a new product and/or lender and keep your full equity loan. Not all mortgage lenders will fund alongside the equity loan scheme and so you may find yourself a little restricted. 

• Option two 

Arrange a remortgage for a higher amount to repay your existing mortgage and all of the equity loan, thus giving you full ownership of your property. This is the most common way to pay off the equity loan. 

• Option three 

Arrange a remortgage for a higher amount in order to repay your existing mortgage and partially repay your equity loan. Again, the mortgage market for this option is limited, so you may struggle to get the deal you want.