Can You Transfer Help to Buy Equity Loan to Another Property?
If you're a homeowner who used the Help to Buy scheme and need to move, can you transfer the equity loan to a new property?
The straightforward answer is no. The Help to Buy Equity Loan is tied to the specific property you purchased with it, and cannot simply be transferred over to another one.
If you need to sell your current property, you'll need to repay the loan in full. If you cannot repay the loan in full, you could struggle to purchase a comparable property.
Why would someone need to transfer their loan to another property?
You might be relocating for work, upsizing or downsizing your home, managing a divorce or separation, or your financial situation might have changed.
Government support programs like Help to Buy are subject to frequent changes. Although Help to Buy ended in 2023, you could be eligible for a home-mover scheme depending on specific factors, including your situation and the support you previously used.
Need to borrow more to move?
To ensure you get the most accurate and up-to-date advice, consult an experienced mortgage broker. They can guide you through the complex rules of government schemes and lender requirements.
Want to take the next step? Make an inquiry to be matched with a skilled broker, absolutely free.
Is selling a Help to Buy property more difficult?
It can be. A Help to Buy property can be sold on the open market at any time. If the Equity Loan isn't yet repaid, it will be repaid from the proceeds of the sale after the mortgage has been settled with the lender. Whatever amount is left remaining will belong to you, and you can use this amount as a deposit on your next home.
Before selling, your valuation will have to be carried out by a Homes England-compliant RICS surveyor, at your own expense. If you use a different valuer, they can make you get a new survey with a compliant surveyor, so you'll end up paying twice.
You might require a bigger mortgage to buy a new property of similar value to help cover the percentage of the equity repaid to the government for the loan.
Your current mortgage is likely to be specifically tailored for Help to Buy properties, some were future-proofed to be portable, but many weren't, so you'll need a new one for your new home.
This may leave you having to pay an early repayment charge to your old lender. Some lenders will waive the early repayment charge if you stay with them, but take out a new mortgage product. Contact your lender to find out.
SAM's Help to Buy Repayment Calculator
Check out our Help to Buy Repayment Calculator which estimates your monthly interest payments for your equity loan.
Your Help to Buy mortgage payments differ from the Help to Buy equity loan repayments. You can use our calculator to estimate the interest repayments, but we also have a mortgage payments calculator available.
Should I pay off the loan before selling?
If you can, it will save you from having to get your offer approved by Help to Buy and simplify the conveyancing slightly. There is no hard and fast rule about the best time to repay the loan; as with most loans, the sooner you pay it back, the less you will pay in interest.
Interest on the equity loan is payable after 5 years but at a relatively low rate. If you're remortgaging to pay off the loan, it's advisable to wait until the interest rate on the equity loan aligns with your mortgage rate, but before it increases further.
The longer you wait to repay the equity loan and the more the property value increases, the more you will pay back, as the loan is a percentage of the current value.
We can't predict what will happen, but house prices have trebled in the last twenty years. If this happens again and you wait 20 years to repay the loan, you could pay back 3x what you borrowed, plus the interest you'll have been paying each month.
From local RICS surveyors for a Help to Buy valuation to expert solicitors for remortgaging or selling your Help to Buy property, SAM has you covered.
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Exploring your options
It's important to monitor the housing market. If property prices where you're selling are falling faster than the area you're buying in, it might be best to wait until it re-balances.
Even if prices haven't increased significantly, you might be stuck trying to find the 20% equity loan hole if you haven't managed to staircase yet.
Stay informed about new government schemes or updates to existing schemes as you might find yourself in a situation where you can benefit from this.
Selling your property and repaying the loan
You'll need to use the proceeds from your sale to settle the Help to Buy Equity Loan. However, if property prices have increased significantly, you may not have enough funds to purchase a new property after repaying the loan.
Equally, lower-than-expected property prices mean you won't have enough from the sale to buy again.
This means you will need to downsize to a more affordable home, look into alternative schemes like Shared Ownership, or hop off the property ladder and begin renting.
If you meet specific criteria, you might be able to apply for social housing provided by your local authority or a housing association.
Looking to transfer equity in a Help to Buy home?
Adding or removing an owner can be more complex than a standard transfer. Read our comprehensive article on transferring equity in a Help to Buy property.
Other options for home-movers
Shared Ownership allows you to purchase a share of a property and pay rent on the remaining share. You'll be borrowing less from the mortgage lender and will have the option to staircase in the future to build up more equity in the property.
For example, you might originally own 50% of the property and decide to staircase in increments of 10% until you fully own the home.
You might still qualify for specific mortgage products designed to help buyers with smaller deposits. Options like 'Deposit Unlock' and 'Deposit Boost' can offer alternative solutions.
Our experienced conveyancing solicitors can help you staircase your Help to Buy equity loan.
Get a free, no-obligation online quote today.
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