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Help to Buy equity loans: is it time to remortgage?

Take the hassle out of remortgaging – we’ll search thousands of deals to pick the right one for you.

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Get the help you need

  • In April 2013, the government launched its flagship Help to Buy scheme on new-build homes.
  • Since its launch, nearly 150,000 equity loans have been granted to first-time buyers and home movers, with many of the first-time buyers now reaching the end of their five-year fixed-rate mortgages.
  • If you’re coming to the end of your fifth year in your Help to Buy home, it’s time to consider your options.

Let us do the hard work

  • Our expert mortgage advisers will give you independent and impartial remortgage advice, searching the whole of the market – including deals you can only get direct from lenders – to find one that meets your needs.
  • We will let you know, completely free of charge, if you could get a better rate by going direct to a lender rather than using our service.

Discover your options

Remortage to buy out part or all of your government loan

If your property has increased in value, you could consider releasing some cash to pay o some or all of your equity loan by remortgaging.

When doing your calculations, remember that you could well be paying o more than you borrowed, as the loan is a percentage of the property’s current market value rather than the amount of cash that you originally borrowed.

This means that if your equity loan was for 20% of the property value and your home has increased in value by £20,000 in the past five years, you’ll be paying the government an extra £4,000. You’ll also need to factor in legal and valuation costs, and will need to seek permission from the post-sales Help to Buy agent.

Start paying interest on your equity loan

Once your interest payments kick in, you’ll need to start paying a fee of 1.75%, rising each year by any increase in the Retail Prices Index (RPI), plus 1%. This could add a significant chunk to your monthly outgoings.

Sell your home and pay off the loan

If you’ve enjoyed significant price growth or your circumstances have changed, you might be ready to make a move elsewhere – perhaps into a larger home.

In this scenario, you could sell your home and repay o the equity loan in full.

Whether you should do this depends on your personal plans and the local property market. Settling the loan could wipe out your equity, preventing you from progressing up the property ladder outside Help to Buy.

Remortgaging with a Help to Buy equity loan

At the end of January, Skipton Building Society launched a new range of remortgage products for Help to Buy users who want to pay o their equity loans.

The deals, which are being dubbed ‘hexit’ mortgages, allow borrowers to use increases in the value of their home to pay their equity loans o in full.

Similarly, Leeds Building Society is offering a new deal with £1,000 cashback for Help to Buy homebuyers and remortgagers, though this deal is only available through mortgage brokers.

Mortgage calculators

Get an idea of how much you could borrow and what your repayments might be with our handy calculators.

Use the stamp duty calculator How much can I borrow? Use the repayment calculator

About Which? Mortgage Advisers

We’re part of Which?, the independent consumer champion, and we make sure your interests come first. All our advisers are completely impartial and CeMAP qualified - so you can count on their expert knowledge. Watch our short video to meet our team and find out how we can help you get the right deal for you.

Friendly experts offering
personal remortgage advice

we’ll search for a remortgage that meets your needs.

Call us now

0800 3167 0493

Or we can call you...

Request a call back

Lines are open:
Monday to Thursday: 8am - 8pm
Friday: 8am - 6pm
Saturday: 9am - 1pm

  • Alex from Which? was very efficient, understanding to our needs and prompt during our remortgage. I will not hesitate to recommend this company to anyone because of their outstanding service.
  • We had a let-to-buy mortgage set up, including a remortgage on our current property. Which? understood our needs well, found great rates, and were very helpful at every step along the way. They went out of their way to push the lenders to get our mortgages approved ASAP. Very thorough and helpful

We’re here to help you

Contact Which? Mortgage Advisers free from a mobile or landline on 0800 3167 0493

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