Almas Uddin
Founder and Mortgage Advisor
15 Jan 2024
Finding the Lowest Help to Buy Mortgage Rates
Help to Buy mortgage rates vary between lenders, and the Revolution Broker team often helps applicants who have been rejected elsewhere due to issues such as a low credit score.
Here we'll run through how you can find the best Help to Buy rates - in a more accurate way than an online calculator! We'll also explain how eligibility criteria work, and why these make a tremendous difference in the mortgage offer you're likely to receive.
For tailored support with finding the lowest Help to Buy rates, give Revolution Brokers a call on 0330 304 3040, or drop us a message to [email protected].
How Can I Get the Best Rates on Help to Buy Lending?
Our top tip is to use an independent broker, who isn't tied to any bank or lender.
There are thousands of online mortgage rate tables. Still, these are very generic and often provide no level of accuracy since they can't know your circumstances, or whether you meet any specific lender's criteria.
Whole-of-market brokers can recommend any product from any lender that we think best fits your need, and work through your application to ensure you tick all the boxes.
Where Can I Find Low Help to Buy Remortgage Rates?
If you are coming to the end of a fixed-term and want to remortgages, the same applies - give us a call, and we'll advise on the best lending options.
You can refinance a Help to Buy mortgage similarly to any other home loan, so there isn't any restriction on which lenders you can apply to.
How Do Help to Buy Mortgage Rates Vary in Different Areas?
You'll find that the Help to Buy scheme mortgage rates depend on where you live, and which lenders operate in that area.
Other factors that can impact your rates include:
- Having a bad credit rating.
- Applying with low income.
The equity loan available also depends on your location.
How is Help to Buy Different in Wales and Scotland?
In Wales, you have the same terms as in England; you need a 5% deposit or higher, and can borrow a loan of up to 20% of the property value - leaving a mortgage requirement for the 75% balance.
Londoners can borrow up to 40% through an equity loan.
Scottish borrowers still need the minimum 5% deposit but can borrow up to 15% through the equity loan scheme, requiring a higher mortgage LTV of 80%.
What are the Interest Rates on Help to Buy Equity Loans?
The loan itself is interest-free for five years. After this time, you pay 1.75% interest on the remaining balance - in Scotland, there is no interest charge.
Each year, the rates increase by 1%, plus the RPI - retail price index, which can go up or down with inflation.
As an illustration - if you are in England or Wales, and buying a home at £200,000, you'll need a 5% deposit of £10,000 and can borrow up to 20%, so £40,000.
The interest rates you'll pay each year will look as below - based on an example 5% RPI:
|
Year
|
Interest Rate (RPI + 1%)
|
Loan repayment (interest-only)
|
|
Up to year 5
|
0%
|
£0
|
|
6
|
1.75%
|
£700
|
|
7
|
1.86%
|
£744
|
|
8
|
1.97%
|
£788
|
|
9
|
2.08%
|
£832
|
|
10
|
2.21%
|
£884
|
You should always remember that these are payment values against the equity loan - and the mortgage repayments are entirely separate.
What are the Best Rates for a Help to Buy New Build Mortgage?
Help to Buy is aimed solely at new-builds, so the best rates will depend on your circumstances, and how closely you meet the lending criteria.
How Can I Repay a Help to Buy Mortgage?
Your mortgage and the equity loan are two different types of lending.
You can repay the equity loan, or you can continue making mortgage repayments, and interest-only payments against the equity loan balance.
Many borrowers choose to keep the equity loan and repay it when they remortgage or sell the property.
However, if your property increases in value, you need to pay back a higher value than you borrowed - based on the percentage value of the loan, now applied to the property's current market value.
How will Adverse Credit Affect my Help to Buy Mortgage Rates?
Bad credit or a low credit score are always likely to increase the interest rates you are quoted on a mortgage, or make it harder to find a lender that will approve your application.
There are different degrees of severity, so if you have minor credit issues such as a couple of late payments, it's likely to make much less of an impact than something more serious such as a bankruptcy or repossession.
Lenders will also consider how long ago the issues occurred, and rely on their lending policies to assess how much of a risk factor it presents.
Revolution Brokers works with a vast network of bad credit specialist lenders, so if you have been turned down for a Help to Buy mortgage or want to compare the best rates on the market, get in touch on 0330 304 3040.
How Can a Help to Buy Broker Get me the Best Rates?
Our role as a market-leading UK mortgage broker is to assess your needs and recommend the most competitive and affordable lending products that we believe fit closest with your circumstances.
Revolution Brokers can:
- Search the entirety of the UK market to recommend any product from any lender.
- Calculate your total borrowing and monthly repayments.
- Help you with the Help to Buy application process.
- Submit your mortgage application and support you through to completion.
Give us a call, or drop a message to [email protected] and we'll get the ball rolling to find you the borrowing you need!
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