Remortgaging and repaying a Help to Buy equity loan

A Help to Buy equity loan is a government loan that helped people buy a new-build home with a smaller mortgage and a smaller deposit. In England the loan was worth up to 20% of the property value, increased to 40% in London from February 2016, and buyers only needed to take out a 75% loan-to-value mortgage, or less in London¹. The scheme required a deposit of at least 5% and was limited to new-build homes in England². It closed to new applicants in 2022 and completed its final purchases in 2023, but hundreds of thousands of homeowners still have the loan on their property and will one day need to deal with it, usually by remortgaging, selling, or paying it off².

The key thing to understand is that the equity loan is not a debt that shrinks over time. It is a share of your home. If the government lent you 20% of the purchase price, you owe it 20% of whatever the home is worth when you repay, not the amount you originally borrowed³. That makes remortgaging with an equity loan in place more involved than an ordinary remortgage: you need the scheme administrator's permission before you change lender or borrow more, and there are fees and rules about what you are allowed to do⁴.

This page explains how the loan works, when the interest fees start, how repayment amounts are calculated, what permission you need to remortgage, and the options for paying the loan off in part or in full.

How a Help to Buy equity loan works: up to 20% of the home's value, 40% in London

Help to Buy: Equity Loan was a government home-ownership scheme that helped people onto the housing ladder by letting them borrow up to 20% of the home's purchase price, or 40% in London, interest-free for the first five years³. The buyer put down a deposit of at least 5%, took a repayment mortgage of up to 75% of the property's value, and the government lent the rest¹. The scheme applied to new-build homes with a maximum value of £600,000⁷.

A worked example from the official repayment guide shows the shape of the arrangement: a home outside London bought for £200,000 with a 5% deposit of £10,000, a repayment mortgage of £150,000, and an equity loan of £40,000, which is 20% of the purchase price³. The equity loan is secured on the home alongside the mortgage, which is why the scheme administrator has a say in what you do with the property and its borrowing.

The scheme ran in England. An independent evaluation commissioned by the Ministry of Housing, Communities and Local Government examined the scheme from 2013 to 2023, covering the original scheme and the later version that ran from 2021 to scheme end in 2023⁴. Wales ran its own version, Help to Buy Wales, which provided an interest-free loan for the first five years of up to 20% of the property value⁸. Scotland and Northern Ireland had their own schemes, which have now closed.

Because the loan is a percentage share rather than a fixed debt, its value moves with the housing market. If your home rises in value, the amount you owe the government rises with it. If it falls, the amount falls. The government's own evaluation noted the scheme's design, with the buyer only needing to service a 75% loan-to-value mortgage, was central to how it worked¹. By 2024/25 the government had made a £1.38bn profit from the scheme, largely through borrowers repaying more than they borrowed as house prices rose⁹.

Interest-free for five years, then a 1.75% fee that rises with inflation

The equity loan costs nothing for the first five years. From year six, a fee of 1.75% of the original loan amount becomes payable, and it rises annually¹. Citizens Advice describes the annual rise as inflation plus 1%⁷, while the official guidance on paying interest states that each April the interest rate goes up by the increase in inflation, if any⁵. The two descriptions differ on whether an extra 1% is added each year, so check your own loan terms: the exact formula is set out in the equity loan terms and conditions you signed¹⁰.

The fee is charged monthly, and it is important to understand what it is: a fee for having the loan, not a repayment of it. Interest payments do not go towards repaying your equity loan⁵. When you bought your home with an equity loan, you agreed to pay monthly interest and management fees when they are due¹¹. The fee is worked out on the original loan amount, so unlike a repayment mortgage, where each monthly payment pays off a bit of the loan as well as some interest¹², the equity loan balance stays exactly where it started unless you actively repay some of it.

The Welsh scheme follows the same pattern: from year six, homeowners pay a monthly interest fee of 1.75% of the equity mortgage¹³. Because the fee rises each year, the cost of keeping the loan grows over time, which is why many homeowners look at repaying some or all of it once the interest-free period ends.

You can repay the equity loan in part or in full at any time

You are not locked in. You can repay your equity loan in part or in full at any time, for example when you sell your home or remortgage⁵. There are no early repayment charges, but you will pay an administration fee and other charges when you apply to repay³. The administration fee for a remortgage is £115⁶.

The rules set a floor and a ceiling on part repayments:

• Part payments must be at least 10% of the full repayment amount, based on what your home is worth at the time¹⁴.
• You cannot leave less than 5% of the market value amount to repay if you choose to make a part payment³.

So a homeowner with a 20% equity loan could repay it in two 10% steps, but could not chip away at it in small amounts. The government publishes a repayment checklist to help you apply to repay in part or in full¹⁵.

If you repay using your own money, such as savings or an inheritance, you will need to confirm where the money has come from, for example with a copy of a bank statement showing the money¹⁴. If you want to repay part of your equity loan when you remortgage, you will first need permission to change your mortgage provider or increase the amount you are borrowing on your existing mortgage¹⁶.

One warning worth knowing early: the terms of the equity loan prohibit buying a second property while you have a Help to Buy: Equity Loan. This is a breach of the terms, and you will be legally required to repay the equity loan in full³.

The amount is set by what your home is worth when you repay

This is the feature that surprises most people. The amount you repay is based on the current market value of the home at the time you choose to repay, and the percentage you want to repay, not on the amount you originally borrowed³. If you received 20% of the initial purchase price, you pay back 20% of the current market value¹⁷.

When you repay in full on a sale, the figure used is the higher of two amounts: the market value of your home as set out in a compliant RICS valuation report, or the price you sell the home for³. This stops a sale to a relative or a connected buyer at an artificially low price from reducing the government's share. The Welsh scheme works the same way: the repayment is based on either the market value of your property or the sale price, whichever is the higher, established via an independent RICS valuation¹⁸.

The Welsh scheme's post-completions guide spells out the mechanics plainly:

If the market value rises, the amount to repay rises; if it falls, it falls¹⁹. In practice this means the equity loan behaves like an investment the government holds in your home. A homeowner who borrowed £40,000 on a £200,000 flat owes 20% of the flat's value at repayment, whether that works out at more or less than £40,000. The valuation matters, and the cost of obtaining a compliant RICS valuation is part of the process. Our guide to mortgage valuations and surveys explains how valuations work.

Remortgaging with an equity loan still outstanding: permission comes first

Remortgaging, in the Bank of England's definition, occurs when existing borrowers redeem their current mortgage in favour of a new one secured on the same property, but with a different mortgage lender²⁰. With an ordinary mortgage you can do this freely when your deal ends. With a Help to Buy equity loan in place, you cannot: you need the scheme administrator's permission first¹⁶.

Permission is needed to do two things: change your mortgage provider, or increase the amount you are borrowing on your existing mortgage¹⁶. And the scheme administrator will only allow you to remortgage and borrow more money for a short list of purposes²¹:

• to pay back part or all of your equity loan
• to make structural alterations, when you have permission for them
• to fund a transfer of equity

There is a narrow exception: the scheme administrator may allow you to borrow more on your repayment mortgage to pay off leasehold arrears or mortgage arrears, considered case by case²¹.

Before you can make any changes to your equity loan, you must settle any outstanding payments, or set up a payment plan by contacting the customer service team²². This applies to remortgaging as much as anything else: a history of missed interest payments will block the process until the arrears are resolved. Our page on mortgage arrears covers what to do if you have fallen behind.

The Welsh scheme adds its own conditions on a remortgage. The new first charge lender must be a qualifying lending institution, such as a bank or building society, registered with the scheme; the new first charge mortgage must be a repayment mortgage, with interest-only not permitted; and the new lender must confirm it will not allow additional borrowing without the scheme's prior consent¹⁹. One further rule applies in both countries: one of the original homeowners on the equity loan must stay the same until the equity loan is repaid in full²³.

Paying off the equity loan by remortgaging

One of the permitted reasons to remortgage and borrow more is to pay back part or all of your equity loan²¹. This is the route many homeowners take at the end of the interest-free period: rather than paying the rising fee out of monthly income, they increase the mortgage to clear the equity loan, converting a fee that buys nothing into borrowing that is actually repaid over time.

The process is the same as any permission application: settle any arrears, get a mortgage offer in place, apply for permission, and pay the £115 remortgage administration fee⁶. The government's repayment guide is a reminder of how you can repay your Help to Buy: Equity Loan, and the repayment checklist sets out what you need to apply¹⁵. If you intend to borrow more on your repayment mortgage when you change the homeowners, you must have a mortgage offer or funds in place before you apply²³.

Whether this makes sense depends on the numbers. Increasing the mortgage adds to the balance on which interest is charged at your mortgage rate, but it removes the equity loan fee, which rises each April⁵. It also increases your loan-to-value ratio, which affects the deals available: our guide to loan to value explains how that works. Note that the equity loan itself carries no early repayment charges, only administration fees³, so the comparison is between the mortgage interest on the extra borrowing and the equity loan fee, plus the fees of each route.

Staircasing or repaying all at once: how each option works

Repaying in stages is sometimes called staircasing. Under the English scheme, part payments must be at least 10% of the current market value of your home, and you cannot leave less than 5% outstanding³. Each part repayment reduces the government's share, and after a part repayment your monthly interest payments are worked out based on the percentage you have left to repay and the original purchase price³. The official guidance on paying interest puts it the same way: following a part repayment, your interest is worked out using the percentage of equity loan left to repay and the original market value of the home⁵.

So staircasing has a direct effect on the monthly fee. A homeowner with a 20% loan who repays 10% of the home's value halves the government's share, and the interest fee falls accordingly. But the fee only disappears entirely when the loan is repaid in full, and because interest payments do not reduce the balance⁵, the only way to shrink the debt is an active repayment.

Repaying all at once is simpler: one valuation, one application, one administration fee, and the loan is gone. The full repayment amount is the government's percentage share of the current market value, or the sale price if you are selling, whichever is higher³. After that the home is no longer subject to the scheme's rules: no permission is needed to remortgage, no monthly fee, and no restriction on buying another property.

The Welsh scheme has the same structure, with the equity mortgage repayable at the current market value¹⁹. In Wales the equity mortgage itself runs from a minimum of 10% to a maximum of 20% of the market value of a newly built home¹³. Elsewhere in the UK, shared equity schemes work differently: Scotland's Mortgage to Shared Equity scheme, for example, involves a repayment period of 10 years for the shared equity stake²⁵, and the Help to Stay Wales scheme, which supports homeowners struggling with payments, requires its equity loan to be repaid in full at the end of a 15-year term, though it can be repaid in full at any time during that term²⁶.

Remortgaging to lower your monthly payments or release equity

Not every remortgage is about the equity loan. Many Help to Buy homeowners simply want a better mortgage rate when their fixed deal ends, keeping the equity loan untouched. That is allowed, but the permission rules still apply: you need permission to change lender, and the new borrowing cannot exceed the current mortgage balance unless it is for one of the permitted purposes¹⁶. A like-for-like remortgage, where the balance stays the same, is the straightforward case.

Remortgaging to release equity, meaning borrowing more than the current mortgage balance to get cash out, is generally not permitted while the equity loan is in place²¹. The permitted purposes do not include raising money for other uses. Homeowners looking to release money from their property have other routes, each with different costs and risks. Equity release, in the form of a lifetime mortgage, allows older homeowners to borrow against the home while still living there, and can be used to manage debt or repay a mortgage, but it is a different product with its own rules²⁷. Alternatives worth considering first include selling and moving to a cheaper property, using existing savings and investments, making sure you are claiming all available benefits, and home improvement grants²⁷. Our guide to equity release covers how it works and its downsides.

For homeowners in difficulty rather than looking to raise cash, Help to Stay Wales provides free financial advice and a shared equity loan to reduce monthly mortgage payments to a more affordable level, with the existing lender's written consent²⁶. If selling is the only option and the home is worth less than the mortgage plus the equity loan, the Welsh scheme may accept a reduced payment to allow a sale in negative equity, provided all equity mortgage obligations have been complied with¹⁹. Business Debtline notes that a lender can stop a sale going through if the price will not cover the outstanding mortgage, so their agreement is needed²⁵.

When comparing remortgage deals, fees matter as much as rates. Which? reported an average fee of £1,349 on the top five-year fixed deals for remortgagers in January 2026, an increase of £475 for the best two-year fixes compared with the same time a year earlier²⁸. Adding a fee to the loan increases the balance: Which? calculated that adding a typical £999 fee to a £300,000 loan at 4% over 25 years increases monthly repayments by just over £5²⁸. Rate movements have been modest, with five-year fixes rising a little more than two-year deals, by around 0.1 percentage points since the start of August 2025²⁹. Our guides to remortgaging, product transfers and mortgage fees and charges cover the comparison in detail.

Moving home with a Help to Buy loan

Moving home means the equity loan has to be dealt with, because the loan is tied to the property, not the person. The usual route is to sell the home: the equity loan is repaid from the sale proceeds as a percentage share of the sale price or the RICS market value, whichever is higher³, and the mortgage is repaid in the normal way.

Porting, meaning taking your mortgage with you to a new home, does not take the equity loan with it. The equity loan must be repaid when the property is sold. In Wales, a change of ownership requires a new mortgage offer from a qualifying lending institution registered with the scheme and a new equity mortgage, where the scheme continues on a new property¹⁹. In England, the scheme has closed to new applicants, so the equity loan cannot be transferred to a new home: it is repaid on sale.

One rule matters if the homeowners change but the property does not: one of the original homeowners on the equity loan must stay the same until the equity loan is repaid in full²³. A transfer of equity, such as adding or removing a partner after a separation, is possible, and borrowing more on the repayment mortgage to fund it is one of the permitted purposes²¹, but the mortgage offer or funds must be in place before you apply²³. Our guide to joint mortgages, separation and transfer of equity covers that process, and porting a mortgage when you move home explains porting itself.

Where Help to Buy is closed and which schemes remain

The Help to Buy: Equity Loan scheme closed to new applicants in England on 31 October 2022³⁰, and completed its final purchases in 2023². All Help to Buy schemes across other UK countries have now closed³⁰. The earlier Help to Buy mortgage guarantee scheme closed to new loans on 31 December 2016³¹. The government's evaluation found that the scheme's closure led to a reduction in first-time buyer mortgage sales of approximately 10 to 15% compared with what would have happened with the scheme¹.

Wales is the exception: the Help to Buy Wales scheme has continued, providing an interest-free loan for the first five years of up to 20% of the property value⁸, with applications due to close on 31 March 2027. Our guide to mortgages in Wales covers the Welsh schemes in detail.

The Help to Buy ISA, a separate savings product, closed to new accounts on 30 November 2019. Existing account holders can continue saving until 30 November 2029, and the government bonus must be claimed by 1 December 2030³².

For homeowners who still hold an equity loan, the scheme's closure changes nothing about the loan itself: the terms and conditions continue to apply¹⁰, the interest fee continues to rise each April⁵, and the repayment options remain open. The government publishes a glossary of the words and phrases used in managing the loan and repaying it³³, and the scheme's customer service team handles payments, changes to the agreement and questions about the scheme¹⁰. Free debt help is available from charities such as StepChange, which advises on mortgages and arrears³⁴, and our guide to mortgage rules and your rights explains the protections that apply.