Skipton Intermediaries has launched a calculator to support brokers as they guide Help to Buy customers on their next move in the mortgage market.
Brokers can download the Help to Buy refinancing calculator from Skipton’s website following the fifth anniversary of the launch of the government’s Help To Buy scheme. Now many customers will start paying interest on the government equity part of their mortgage loan.
The aim of the calculator is to help brokers give their clients all of the available options when they come to the end of their existing Help to Buy mortgage and making the decision to either keep or repay their equity loan. It does not provide a guide to staircasing.
Alex Beavis, Skipton’s senior products manager for mortgages, said: “As people’s circumstances vary we felt we should provide the tools to help homeowners make a decision regarding their future mortgage loan plans.
“We’ve created an industry-first Help to Buy Refinancing calculator, which enables brokers to explore the different repayment options for their clients regarding their equity loan.
“Brokers can input figures supplied by customers, including present monthly payment figures, length of mortgage and present house values, and the calculator will present different scenarios from which the brokers can advise.
“Once the figures have been inputted, some homeowners may wish to take a higher monthly mortgage in a bid to pay back the government equity share, while others may wish to keep the equity or even pay off an amount.
“The calculator will give brokers and their clients the opportunity to discuss their next mortgage move armed with more information than they might have had.”
It’s designed to help brokers understand how a client’s equity loan may have changed since completion and compare the likely financial impact of repaying to retaining the equity loan.
The calculator can project the future size of the equity loan if not repaid and compare monthly mortgage and equity interest payments in different repay/retain scenarios.
Also available to download is a new guide for brokers “Help to Buy Refinance Options: How to support your clients during or at the end of their five-year interest-free equity loan period”.
The Help to Buy refinancing calculator is for illustrative purposes only and is not intended as mortgage advice.
From the launch of the Help to Buy: Equity Loan scheme on 1 April 2013 up to 30 September 2017, 144,826 properties were bought with an equity loan.
The total value of these equity loans was £7.39bn, with the value of the properties sold under the scheme totalling £35.31bn.
Most of the home purchases using the Help to Buy: equity loan scheme were made by first-time buyers, accounting for 116,898 (81%) of total purchases.
For the Help to Buy: new buy scheme, 5,694 house purchases were made since the launch of the scheme in March 2012. There were no new transactions in Q3 2017 due to the scheme.