Remortgage Help to Buy: Clear Your Loan

If you used a Help to Buy equity loan to purchase your home, Remortgage Help to Buy could be the best way to repay it once interest charges begin.

This guide explains how remortgaging works, what costs to expect, and the steps to clear your equity loan with confidence.

Once you reach year six, interest kicks in at 1.75% a year, and this rate rises every April in line with inflation (CPI + 2% for newer loans, RPI + 1% for older ones).

With more homeowners now hitting or passing that five-year point, lots of people are wondering whether it’s better to keep the Help to Buy loan or clear it — often by remortgaging. Here’s a simple breakdown to help you understand your options.

Why Remortgage Help to Buy Could Save You Money

For the first five years, your equity loan doesn’t cost you any interest.

From year six onwards, you’ll pay:

• 1.75% interest in year six
• Then each April, your interest rate increases based on inflation (CPI + 2% or RPI + 1%)

CPI (Consumer Prices Index) and RPI (Retail Prices Index) track how quickly prices are rising. The extra 2% or 1% is added on top and used to adjust your interest rate — it’s not simply added to the rate.

On top of that, there’s also a £1 monthly management fee for as long as the equity loan is outstanding.

Why think about remortgaging to clear the equity loan?

Remortgaging can be a great way to repay your Help to Buy loan, but it’s not the right move for everyone.

The upsides:

• You stop paying Help to Buy interest and the £1 monthly fee once the loan is cleared.
• Lenders often offer better mortgage rates when there’s no second charge, which can improve your loan-to-value (LTV).
• Any future increase in your property’s value is 100% yours.
• You generally have fewer restrictions around remortgaging, home improvements and selling.

Reasons you might keep the loan for now:

• If you’re in negative equity or your LTV is still high, increasing your mortgage may not be affordable — or it might push you into a higher-rate band.
• If you plan to move soon or need to prioritise savings or other debts, holding off may make more sense.
• Some lenders will only accept your remortgage if the Help to Buy loan is being repaid, which can limit your options.

The two main ways to repay your Help to Buy loan

You can repay your equity loan in full or in part at any time. The amount you pay back is always based on your home’s current market value multiplied by the percentage you originally borrowed.

1. Remortgaging to raise the funds

You can:

• Remortgage up to a suitable LTV using any increase in your property value, or
• Increase your mortgage borrowing to cover some or all of the equity loan directly

You’ll usually need:

• A RICS valuation (valid for 3 months)
• A redemption figure from the scheme administrator (e.g. Target)
• A solicitor to handle the legal work and remove the second charge

There’s also an administration fee when you redeem the loan — whether fully or partially. Many people prefer to clear it in one go to avoid repeat fees.

2. Using Savings vs. Remortgage Help to Buy

If you have savings, inheritance, a bonus or other funds available, you can repay the loan without increasing your mortgage.

You’ll still need:

• A valid RICS valuation
• A solicitor or conveyancer
• The equity loan redemption fee
• Proof of where the money came from (for anti-money-laundering checks)

Partial Repayments: Staircasing Your Help to Buy Loan

• The minimum partial repayment is 10% of the current value of your home.
• You can’t make a part repayment if it would leave less than 5% of your home’s value still outstanding. At that point, you’ll usually need to clear the loan in full.

Step-by-step: How to Remortgage Your Help to Buy Loan

Here’s a simple overview of the process most people follow:

1. Get a RICS valuation

Book a valuation from a surveyor who is a member of RICS. The report normally lasts 3 months.

2. Check your balances

Find out your current mortgage balance and the percentage of equity loan you originally took.

3. Decide how you want to repay

Choose between full repayment or a partial repayment, and whether this will come from a new mortgage, your savings, or a mix of both.

4. Instruct a solicitor

Choose a conveyancer familiar with Help to Buy repayments, as their details are needed by both the equity loan provider and your new lender.

5. Request a redemption figure

Send your valuation and repayment application to the scheme administrator, pay their admin fee, and wait for your redemption statement.

6. Apply for your new mortgage

Submit your remortgage application including details of the Help to Buy loan, your solicitor, and how the repayment will be handled.

7. Completion and Land Registry updates

Your solicitor will use the new mortgage funds (plus any savings) to repay the equity loan. Once cleared, the second charge is removed from the Land Registry.

Key Things to Remember Before You Remortgage Help to Buy

• Your repayment is based on today’s value, not the amount you originally borrowed. If property prices have gone up, the repayment will be higher.
• Valuation timing matters. If the process takes longer than 3 months, you may need an updated valuation.
• Budget for extras: valuation fees, legal fees, the scheme admin fee, any mortgage product fees, and early repayment charges if you're leaving your current deal early.
• The equity loan must be repaid if you sell your home, pay off your main mortgage without replacing it, or reach the end of the equity loan term (usually 25 years).

Final Thoughts: Is Remortgage Help to Buy Right for You?

Remortgaging to clear your Help to Buy equity loan can be a really effective way to take full ownership of your home and reduce long-term interest costs. It just needs good timing, the right mortgage deal, and a clear view of your budget.

If you'd like help working out whether it’s the right move for you, just reach out — we can talk everything through in simple, friendly terms and look at all your options.

Risk Warnings

Your home may be repossessed if you do not keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.