Early Adopters Of Help To Buy, Get Ready To Tighten Those Belts

Thousands of first-timers who took advantage of the Government’s Help to Buy equity scheme – launched five years ago – are about to be reminded of the extra price to pay for the support received. The scheme allows borrowers to take out an interest-free loan of up to 20 per cent of the value of a new-build property worth up to £600,000 – so long as they can scrape together a five per cent deposit.  In return, the borrower must pay the Government back – plus a share of any increase in the property’s value when it is sold. But the five-year interest-free period is almost up for the early adopters. From next month they will have to start repaying 1.75 per cent interest on the Government loan (and the rate will rise annually by the Retail Price Index, currently 3.6 per cent, plus another 1 per cent). Someone who took a 20 per cent loan on a £600,000 property will be paying an extra £175 a month. Read more on the Daily Mail website.

http://www.dailymail.co.uk/money/comment/article-5539933/Early-adopters-Help-Buy-ready-tighten-belts-says-SALLY-HAMILTON.html