Help to Buy / Help 2 Buy experiences/advice?

[SneakySimon]

Interest Rate

I got 3.34 on 2 year fix (plus an incentive of £150 cash and my stamp duty paid of £2,450) - there standard rate is 3.14 (just did a quick search) with no stamp duty paid so not too bad.

We were limited this year to buying a new house so obv lost some money that way as with HTB you have to pay the advertised amount and you can't be given 'incentives' on the house by the builder, though we negotiated grass (£400), dishwasher (£300) and carpets (£1500).

Next year the HTB is extended to 'old' homes which will be interesting.

[SneakySimon]

Monthly Commitment

Yep, around 0.50% higher than if you had 25% of your own funds to put down as the deposit but I guess that is why a lot of people will utilise the HTB scheme, because they dont have the full 25%.

Even though you dont make repayments on the HTB equity loan, Halifax will still deduct a monthly commitment of 3% per annum of the HTB loan proportion for affordability purposes so be careful around this point.

For example, if you are buying a property at £500,000 and contributing a 5% deposit yourself with the HTB loan totalling £100,000 (20%) then they will deduct (£100,000 * 3% = £3,000 / 12 months) £250 per month as a commmitment.

Maybe its changed from when I applied back in May but I don't have a montly commitment amount that I am paying (I just checked the paperwork!)

[Freelancer Financials]

Maybe its changed from when I applied back in May but I don't have a montly commitment amount that I am paying (I just checked the paperwork!)

I think you may have misunderstood what Ben was saying.

You're NOT paying the 3% on the Help to Buy portion of the mortgage. The 3% is used only to calculate affordability. That's it. Remember, Help to Buy is their to help people with low deposits get a property, but they still have to proof that they can meet the mortgage payments.

As you pointed out, the Guarantee scheme (Help to Buy 2) that gets launched in January is even better with less restrictions. Doesn't have to be a New Build and also available to home movers as well as First time buyers!

[TheCyclingProgrammer]

HTB overall is great - interest free loan from the govt of 20% of the mortgage so I earn interest on that 20% and then pay it off in 5 years.

Don't forget to account for the difference between any interest you earn on that 20% over 5 years and any increase in your property value over the 5 years because if the latter is more, it will wipe out any interest you've saved when you repay (although maybe that's just the pessimistic view).

[TheCyclingProgrammer]

Next year the HTB is extended to 'old' homes which will be interesting.

It's not the same scheme though. The current scheme is an equity loan, the new scheme is just a guarantee scheme to help borrowers with smaller deposits get preferential rates - the government won't give you any money towards your house purchase on the extended scheme.