A range of new products have been launched for homeowners who purchased their property using the Government’s Help to Buy: Equity Loan scheme and are looking to remortgage.
The West Brom building society’s new two, three and five-year fixed-rate deals, which offer a £500 cashback payment and free valuation, retain the equity loan.
There is currently a growing number of Help to Buy customers looking to remortgage. The scheme, which launched five years ago, provides first-time buyers and home movers with a loan of up to 20% (or 40% in London) on a new-build home.
The loan is fee-free for the first five years, but after this time interest payments kick in.
Richard Scott, the West Brom’s head of intermediaries, explained: “It has been five years since Help to Buy was first introduced. This means many borrowers are facing important decisions regarding both their equity loan, which now becomes interest-bearing, and their original mortgage deal.”
Repaying the equity loan
West Brom said that as well as its new range of products, which have a loan-to-value (LTV) ratio of 75%, customers could also apply for one of the products in its standard remortgage range, increase their total borrowing and repay the equity loan in full.
Scott added: “The options for Help to Buy customers looking to remortgage are currently fairly limited with not that many providers catering for their specific needs.
“We are stepping forward with a strong product offering and adding some additional competition to this market segment, which can only be a good thing from the customer’s perspective and for intermediaries looking to provide guidance for their clients.”
Rates on West Brom’s new Help to Buy remortgages start at 2.29% for a two-year fixed deal. This comes with a completion fee of £999 but there is also a fee-free option with an interest rate of 2.54%.
The same options are available on the three and five year fixed-rate deals, which start at 2.54% and 2.74% respectively.
West Brom said the cashback it was offering on the mortgage could be used towards legal expenses or administration costs on the loan.
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