In the process of taking out a help to buy loan. From year 6 the interest increases by 1% a year, we’ll be remortgaging or paying off after the five years for sure. Agree with Sandy, a ticking time bomb
My concern is that to remortgage, you're very limited to lenders.
I'm working on the basis that we can pay off, cash, majority of the 20% in the 5 years, which makes sense. If I manage to do that, presumably I can remortgage with anyone.
They're designed with the idea that you'll pay them off, or your house will increase in value so that you can re-mortgage to pay it off, within the 5 years. After that it starts to get quite expensive.
Personally I think it's a disaster waiting to happen, especially if property prices stagnate (and you're in London aren't you PP?).
We'd looking Essex/London border rather than London per se - and also look at a very long-term purchase.
I guess the biggest question is if I can afford, say, £500 extra a month on top of the mortgage payments, would I be better overpaying on the mortgage, saving the £500 a month to pay off the equity loan or just getting a 95% mortgage that costs £500 per month more?