The government backed incentive “Help to Buy” scheme hit it’s five year anniversary in April 2018 and if you bought your home using this offer, it may be time to review your mortgage arrangements as your monthly expenditure may be about to rise…
The Help to Buy scheme offers all first time buyers an interest free loan from the government for the first five years of owning their homes. After the first five years, this loan then becomes repayable at a rate of 1.75% initially, with this rate rising each year by the level of the RPI increase plus 1%.
All being well, you will have been prudent and saved over the five year period and will have savings in place to repay the loan on the five year anniversary. However, if not, your monthly expenditure will increase year on year until the loan is fully repaid.
With some first time buyers having great difficulty in obtaining their mortgage in the first instance, this increase in outgoings may stretch an already strained household’s expenditure.
The first tranche of Help to Buy schemes, totalling 13,423 cases, have their 5th anniversary this month, and will be hit with an increase in monthly costs if they are not in a position to repay the loan in full.
Therefore there is no better time than now to review your mortgage arrangements to establish if your product is the most competitive available.
Not all lenders will offer re-mortgages to Help to Buy scheme mortgage holders, so the sooner you act the better. It may well mean that you end up staying with your existing lender and just “switching” the product when the original product ends. This will normally result in minimal, if not no fees.
Here at David Allen Financial Services Limited we can do the leg work for you and identify the lenders that will offer loans on the Help to Buy scheme and will also process switching your product with the same lender if this is the best course of action for you.
Contact Tami or Kelly on 01228 711881 to arrange a FREE initial appointment to discuss your options.
Posted: April 16th, 2018