Repaying the Help to Buy equity loan

If you bought your home using the Government’s Help to Buy equity loan, repaying that loan is often a key milestone—whether you’re planning to move or you want to clear the balance while staying in the property.

Although the Help to Buy equity loan scheme closed to new applicants, many homeowners still have an outstanding equity stake. In general, the amount you repay is linked to the value of your property at the time the loan is repaid.

What the Help to Buy equity loan was designed to do

Help to Buy (equity loan) launched in 2013 to help first-time buyers purchase with a smaller deposit.

In broad terms:

• You could buy with a deposit as low as 5%
• You took a mortgage for the majority of the purchase price
• The Government provided an equity loan (commonly up to 20% of the property value; higher in London)
• The loan was interest-free for an initial period (commonly the first five years)

Once that initial interest-free period ends, interest can apply and the repayment rules become more important for planning your next steps.

When do you have to repay a Help to Buy equity loan?

For many homeowners, repayment is triggered in one of two ways:

1) When you sell the property

When you sell, the equity loan is repaid as part of the sale process. The repayment amount is calculated using the property’s value at the time of repayment.

Because the equity loan is tied to the property value, a rise in value can increase the amount due, while a fall can reduce it.

2) When you repay the equity loan without moving

You may also be able to repay the equity loan while you remain in the property. This is often considered after the interest-free period ends, when interest begins to accrue.

In practice, the repayment mechanics can be more straightforward when you’re planning a remortgage, because you may be able to use additional borrowing to fund the equity loan repayment.

How is the amount you owe calculated?

A common misunderstanding is that the equity loan amount you received stays fixed.

With Help to Buy equity loans, the repayment is linked to the property’s value at the time repayment is due. That means the equity loan balance can increase or decrease depending on how the property has performed.

A simple example

• Purchase price: £200,000
• Deposit: 5% (£10,000)
• Mortgage: 75% (£150,000)
• Help to Buy equity loan: 20% (£40,000)

If, when you repay, the property is valued at £220,000 (a 10% increase), the equity loan repayment would typically reflect that uplift—so the £40,000 would increase proportionately.

The exact process and valuation approach follow the scheme’s rules, but the principle remains: your repayment reflects the property value at the time of repayment.

Valuations and the role of RICS

Whether you repay when selling or when staying in the property, a valuation is usually required to determine the amount due.

In many cases, the valuation must be carried out by a chartered surveyor who is appropriately qualified and recognised under the scheme requirements (often referenced as RICS). This is important because the valuation needs to be accepted for the repayment calculation.

If the valuation does not meet the scheme’s requirements, it can delay the repayment process and may require further action.

Selling your home with a Help to Buy equity loan

Selling is often the most time-sensitive scenario because the repayment calculation and valuation need to align with the sale timetable.

Key considerations include:

• You’ll need to follow the scheme’s process for involving the equity loan administration arrangements before proceeding with a sale.
• A valuation is required to calculate the repayment amount.
• The repayment amount will be based on the property value at the point of repayment.

Because the equity loan repayment can affect the net proceeds of the sale, it’s worth building this into your planning early—especially if you’re relying on the sale proceeds to fund a deposit on your next home.

Staying in your home: paying off the equity loan after the interest-free period

If you’re not moving, repaying the equity loan can be a way to reduce ongoing costs once interest applies.

When the interest-free period ends, interest can start to accrue. That doesn’t necessarily mean you must repay immediately, but it does make timing relevant for budgeting.

Paying off in one go or in parts

Depending on the structure of your Help to Buy equity loan, repayment may not always be available in very small increments. Some homeowners find that the available repayment options are limited to certain minimum amounts or set proportions.

This is where remortgaging can become a practical option: it may allow you to raise funds to repay the equity loan in line with the scheme’s repayment structure.

Remortgaging to repay the Help to Buy equity loan

Remortgaging can be considered when you want to clear the equity loan while staying in the property.

In broad terms, the idea is:

• You arrange a new mortgage (or additional borrowing)
• The funds are used to repay the Help to Buy equity loan
• You then continue with the mortgage on the new terms

However, remortgaging to repay an equity loan is not just about whether you can borrow—it’s also about affordability and the overall cost of the new mortgage compared with the cost of leaving the equity loan in place.

Important factors to consider include:

• Your monthly income and outgoings (to assess affordability)
• The impact of any new mortgage term on total repayment
• Whether you’re able to repay the equity loan in the required way
• How the valuation and repayment process fits your timeline

Practical planning points

If you’re preparing to repay a Help to Buy equity loan, these steps can help reduce surprises:

• Check your repayment trigger: selling vs staying in the property.
• Plan for valuation timing: valuations can affect both the calculation and the timetable.
• Budget for the repayment amount: because it reflects property value, it can change over time.
• Consider the interaction with your mortgage: if you’re remortgaging, the new mortgage terms and affordability matter.

Government guidance

For the official repayment process and how remortgaging fits in, see:

• https://www.gov.uk/guidance/how-to-repay-your-equity-loan-when-you-remortgage

Important note

Think carefully before securing other debts against your home. If you do not keep up repayments on a mortgage or other debt secured on it, your home may be repossessed.