I think @michaelw90 is doing what I’m doing, and adding the HtB loan onto the mortgage because the interest payments on the HtB loan in year 6 onwards, are interest only payments (you never clear the 20%).
No you pay back 20% (up to 40% if living in london) of the current market value as determined by your RCIS valuation. This means that they can end up getting paid back less money than they borrowed to you if your house gets a valuation of less than you originally purchased. Source: https://www.helptobuy.gov.uk/wp-content/uploads/Help-to-Buy-Buyers-Guide-Feb-2018-FINAL.pdf page 17
I haven’t got time to read your document but I did notice that it is from 2018. So perhaps it has changed recently? but like I said when I bought mine 5 years ago those were the terms and the document I linked to is what I used 2 weeks ago to pay mine off when I sold my house. This too is available on the HtB website.
Either way. I personally think that after buying your first house you should be looking to move up the ladder in 5 or 6 years and I doubt your valuation will have changed much. It was a great help to for me and I’d recommend the scheme to anyone
The document you link to says the following “The repayment amount you will be required to pay is calculated as a proportion (percentage) of either the current market value or the agreed sale price of your home”. This is slightly different to what you said originally.
I’m stressing the point because the subtle nuances of the scheme are important for people to understand so they can make an informed choice
This is correct now, but wasn’t always true. Before the HTB administrator for my region changed the minimum you could repay was the amount you originally borrowed. When I looked at repaying 50% of my HTB equity loan in 2016 this was the case.
It seems now the repayment amount is wholly dependent on the valuation of the property regardless of what was initially borrowed to at the point of purchase. Which sounds like good news!
What I’ll be interested to see is if someone like me who signed up when there was a floor to the repayment is expected to stick to those terms (in the event that prices plummet). For example - people who sign up now have a £1 monthly fee from the start of the loan. I don’t have that…
Thank you so much guys!
This thread has been super helpful
Catching up on this thread as I’ve just moved into my new build… but my windows are quite large (smaller than my pre-1900 tenement flat though)
I guess, “large” is in the eye of the beholder… (no jokes please… )
Mine are smaller than the houses I grew up in (typically built between 1950 and 1980), but I guess they aren’t “tiny”…
I also wouldn’t mind a lot more of them, but you can’t have everything!
- What was the cost of your first home?
£124,000 - of which I got 4K back
- Was it a new build?
- What was your deposit?
£12,000 - 50/50 with my wife
- How long did it take you to save?
About a year
- What is your monthly mortgage rate?
Back when I first started… £686 pcm - was £484 with me overpaying before I sold it recently
- What was your salary at the time? (please don’t feel obliged to answer)
TMI for the internet
Yeah, depends on the houses I guess.
My old tenement flat the ceilings were 9ft high and the big window in the bay was like (dimensions are in mm):
Obviously my new windows aren’t that big… but the house is certainly warmer
There was a new build the next village older that had people move into the first few houses completed - before the developer realised they hadn’t connected the sewer system on the main estate to the national system yet That would’ve been late 2016, I think.
I’ve also looked at ‘new-build’ apartments which the developer was able to create under permitted development rights (I think they’re called), where they don’t need permission to convert an office building to housing. In all the ones I looked at, there were problems: from the location being less than ideal (middle of an office park), to the layouts being weird (because old offices, natch), to most apartments being too small because the developer can make more money by squeezing extra units in rather than allowing reasonable space for each one.
I’m a supporter of brownfield development and potentially conversions could be well done, but I haven’t seen one yet.
I also found that with new builds there is a huge lack of storage and mine wasn’t a conversion.
When you look at their showroom house, you’ll notice that the bedrooms (for example) have only got the very basics in there such as a bed and a small chest of drawers to emphasise how “big” the rooms are. You’ll obviously want a wardrobe in there but with some houses you will struggle because of the size.
- Same with living room. Just a sofa with a small TV stand.
- No hallway closet for coats because that is a downstairs washroom to meet regulations
- The kitchen diner can fit a family table and chairs in but those against the wall will struggle to get in or out.
These are some of the things to bare in mind when you’re walking round. Try to imagine your things in there and how you’d like to use the space
Here’s the best bit for this too… many showhomes have special size firniture made. A 3/4 size double bed for example to make you think there’s more room than there is.
(replied to the part about Help To Buy but forgot to actually participate in the original topic!)
- £14,500 + 20% Help To Buy Equity Loan
- 0 - gifted by parents
- Current repayment is £830 p/m
- Combined income with my wife was around £55,000 at the time
If I was to do it again I’m not sure I would have used the HTB equity loan scheme, but I can’t deny that it did enable my wife and I to buy a house that ticked all the boxes we wanted for a first home. We were very careful not to use the HTB equity loan to push our purchasing power too far and buy something that could easily become unaffordable (which I’ve seen others do and they’re now trapped). As annoying as having to deal with paying back the loan is (it’s a total admin headache, that involves some hidden costs) we went into it with our eyes open.