Refinancing Help to Buy Mortgages
Help to Buy got a lot of British buyers onto the property ladder with a smaller deposit, using an equity loan from the government to bridge the gap. It works fine right up until two things happen at once: the interest-free period on the equity loan runs out, and you move abroad. Suddenly you’re facing a bill you weren’t expecting, from lenders who are far less enthusiastic about refinancing an equity loan for someone no longer resident in the UK.
We help expats untangle this. Since 2008 we’ve been arranging mortgages for British expats from our offices in the UK, Hong Kong and Kuala Lumpur, and Help to Buy exits are a recurring part of that work – not a one-off oddity.
Why this needs sorting before the interest-free period ends
The equity loan is interest-free for the first five years. After that, interest kicks in – starting at 1.75% and rising annually with RPI plus 1%, which compounds faster than most people expect. Refinancing out of the arrangement before that clock runs out, or as soon as possible afterwards, generally saves you real money.
What refinancing actually involves
- Repaying the equity loan in full, based on a current valuation of the property – you owe the same percentage share of the property’s value as you borrowed, not the original cash amount
- Arranging a new mortgage large enough to cover both your existing mortgage and the equity loan repayment
- Doing all of this as someone now living and earning overseas, which most high-street lenders simply won’t accommodate
Because the equity loan repayment is based on your property’s current value, not what you originally borrowed, a property that’s risen significantly in value can mean a bigger repayment than you’d expect from the original percentage alone. Worth getting a proper valuation early rather than guessing.
Our fees
£295 application fee, 1% completion fee, agreed before you commit to anything.
Frequently Asked Questions
Can I refinance out of Help to Buy if I’ve already moved overseas?
Yes, though the lender pool is smaller than for a UK resident. We know which lenders will consider expat applicants for this specific situation.
What happens if I do nothing?
Interest starts accruing on the equity loan once the interest-free period ends, and it increases each year. Doing nothing is technically an option, just an increasingly expensive one.
Do I need a new valuation?
Yes – your equity loan repayment is calculated against your property’s current market value, so an up-to-date valuation is essential before anyone can tell you the real numbers.
How long does this take?
Budget 8-12 weeks, since it involves both the equity loan redemption process and a new mortgage application running in parallel.
Will I need to be in the UK for any of this?
No, everything can be handled remotely by post, email and electronic signature.
Get in touch with details of your Help to Buy purchase and current situation, and we’ll map out your options.
