Looking to clear your Help to Buy loan? You’re not alone. Whether you’re nearing the end of the interest-free period or just want more control over your finances, paying it off could give you peace of mind and long-term financial freedom. Keep reading to learn your best repayment options and why timing matters.
Understanding Your Help to Buy Loan
The Help to Buy scheme gave buyers a hand by offering up to 20% of the property’s value as a government loan or 40% if you’re in London.
For the first five years, you don’t pay interest, but after that, charges start building up. This is often when many start thinking about their Help to Buy loan repayment. Acting early might help you avoid rising costs, especially if your home has gone up in value since you bought it.
Option 1: Pay the Loan in Full
One of the simplest ways to settle things is to repay the loan in full. This might be possible if you’ve built up savings or received a lump sum.
Before paying it off, you’ll need a valuation from a surveyor approved by RICS (the Royal Institution of Chartered Surveyors). The amount you owe is based on your home’s current value, not what it was worth when you bought it.
A solicitor will also need to get involved to manage the legal work, including removing the government’s charge from your property record.
Option 2: Remortgage to Pay Off the Loan
Some people choose to remortgage to pay off the Help to Buy loan. This means switching to a new mortgage deal and using the extra funds to settle the loan.
If your home’s value has gone up, this can be a smart move especially if it gets you a better interest rate. Just make sure you get advice from a broker to see if it’s affordable and right for your situation.
Option 3: Staircasing in Stages
You don’t have to clear the whole loan in one go. With staircasing, you can pay it off bit by bit normally in 10% chunks.
This can be useful if you’d rather not commit to one big payment. Just keep in mind that each step comes with costs, such as surveys and legal fees. Depending on your finances, one full payment might still work out cheaper overall.
Wrapping Up
Paying off your Help to Buy loan is a personal decision. You might want to clear it all at once, take out a new mortgage, or tackle it in chunks through staircasing. Whatever route you take, the right support makes a big difference.
If you’re ready to move forward, now’s the time to get a solicitor on board. They’ll make sure your repayment is handled properly giving you one less thing to worry about.
Author: Harbs
We're here to promote shopping, trades and attractions in the Market Harborough area. We are an inclusive directory, offering free advertising of local; places, events and businesses of all kinds.