Back to May 2017

Rate falls can benefit existing Help to Buy borrowers

Thousands of borrowers who used the Government’s Help to Buy equity loan scheme can benefit from falls in mortgage rates since they bought their homes.

Home owners who bought soon after the scheme was launched may be looking to remortgage as their existing deal matures in the coming months – official figures§ show almost 32,000 Help to Buy equity loan mortgages were completed in England in 2015.

And data from Moneyfacts# shows two year fixed rate mortgage deals have fallen dramatically in the past two years, so borrowers could reduce their repayments or even the term of their mortgage by switching to a new deal.

According to Moneyfacts, in April 2015, the average two year fixed rate mortgage at 75% LTV (loan to value) was at 2.83%.

Today (Wednesday 17th May), Leeds Building Society launches a new two year fixed rate Help to Buy at 1.50% up to 75% LTV.

The deal is available for purchase or remortgage in England and Wales and comes with a free valuation and a £999 fee.

“Homeowners who were among the earliest to buy under the Help to Buy equity loan scheme may be coming to the end of their current deal and could switch to save themselves some money,” said Jaedon Green, Leeds Building Society’s Director of Product and Distribution.

“Mortgage rates are at historic lows at the moment and the average two year fixed rate mortgage has fallen since the Government launched the scheme in March 2013.

“For example*, if you borrowed £150,000 two years ago for 25 years at the average of 2.83%, your monthly repayment is £697.58.

“Remortgaging now for the remaining 23 years with a balance of c£141,500 at 1.50% brings the monthly repayment down to £606.23. This is a potential saving of £91.35 each month or an overpayment which could cut the overall term of your mortgage and save in the process.”

The Society was the first lender to accept remortgage applications from existing Help to Buy equity loan homeowners and its main Help to Buy equity loan scheme range is available to first time buyers and home movers.

Help to Buy equity loan homeowners can remortgage to a competitive rate with Leeds Building Society and retain their existing loan size, subject to valuation, keeping the Government equity loan.

Alternatively, they can choose to redeem the Government equity loan as part of their remortgage up to 90% LTV and buy the property outright, using any one of the Society’s mortgages available up to 90% LTV.


Notes to Editors

§31,751 Help to Buy equity loan completions (England), DCLG 2015

#Moneyfacts Group is the UK’s leading provider of personal finance data.

*Initial mortgage – two years ago; 25 year mortgage; £150,000 balance; rate of 2.83%; monthly repayment £697.58

Re-mortgage Today; 23 years mortgage remaining; £141,507.08 balance to re-mortgage; rate of 1.50%; monthly repayment £606.23, a monthly repayment reduction of £91.35

Key Features

Introduced Only 2 Year Fees Assisted Help to Buy Fixed Rate mortgage at 1.50% up to and including 31st July 2019:

  • 50% available up to 75% LTV
  • £999 Completion Fee
  • Free standard valuation on properties worth up to £500,000
  • 10% capital repayments are allowed each year
  • Available only through intermediaries
  • Available in England and Wales

Leeds Building Society won the awards for Best Building Society Savings Provider and Innovation in Personal Finance (Part and part mortgages) at the 2016 Moneyfacts Awards.

Leeds Building Society operates throughout the UK, Gibraltar and Ireland and has assets of £15.9bn (at 31st December 2016). The Society’s head office has been based in the centre of Leeds since 1886.