Repaying your Help to Buy loan can feel like a major milestone, whether you’re remortgaging, selling, or simply ready to clear your balance. Understanding how the process works helps you plan ahead and avoid costly delays.
Each stage requires accuracy and the right legal support to make sure everything’s handled correctly. Continue reading to understand how Help to Buy redemption works from start to finish and what you’ll need to do along the way.
Understanding Help to Buy Redemption
When you bought your home using the Help to Buy Equity Loan, the government provided a percentage of the property’s value to help with your purchase. Over time, that loan must be repaid either when you sell the property, remortgage, or decide to redeem it early. The Help to Buy redemption process involves paying back the equity loan based on your home’s current market value, not the original purchase price.
The first step is to obtain an independent RICS valuation. This valuation confirms the property’s market worth, which determines how much you’ll repay. For example, if you borrowed 20% under the scheme, you’ll repay 20% of your home’s current value, even if it’s increased. This valuation remains valid for three months, and if it expires, you’ll need to commission a new one to avoid delays.
Requesting the Redemption Figure
Once you’ve received your valuation, you’ll submit it to the Help to Buy administrator, along with a completed Loan Redemption Form. They’ll issue an official repayment figure based on your valuation. This step usually takes up to ten working days. It’s important to check all details carefully, including your property address, loan reference number, and contact details, to ensure there are no processing issues.
If you’re redeeming the loan because you’re selling your home, your conveyancer will manage communication with both the buyer’s solicitor and the Help to Buy agency to ensure all funds are settled before completion. For homeowners remortgaging, your new lender will usually transfer the redemption amount directly to the administrator through your solicitor’s client account.
Legal Work and Mortgage Arrangements
Once the redemption statement is confirmed, your conveyancer prepares the legal documents to complete the transaction. They’ll review your title deeds, check any existing mortgage, and arrange for the Help to Buy charge to be removed from the Land Registry once payment is made.
If you’re using savings or a remortgage to repay the loan, your solicitor will coordinate the transfer of funds on your behalf. It’s crucial that all payments go through an authorised solicitor as the Help to Buy agency will not accept direct payments from the homeowner. After the funds are received and verified, they’ll issue a confirmation letter to confirm the charge has been cleared.
Final Steps and Land Registry Updates
Once the redemption is complete, your conveyancer will apply to the Land Registry to remove the Help to Buy charge from your title. This step ensures your property is officially free from the government loan. It can take a few weeks for the update to appear on the register, so it’s worth checking that all entries have been correctly amended.
If you’re selling your home, this process happens before the sale completes, ensuring the buyer receives a property with a clear title. For remortgaging, it allows your new lender to register their charge without any restrictions. Either way, completing these steps accurately protects your ownership and future transactions.
Closing Thoughts on a Smooth Redemption
Redeeming your Help to Buy loan brings a real sense of achievement and financial freedom. Although the process involves a few stages, having a qualified conveyancer guide you through each step makes it far easier to manage. From valuation to final registration, being well prepared helps ensure your redemption goes smoothly and without unnecessary stress.
Clearing your equity loan not only simplifies your finances but also prevents the value of the debt from increasing further as the property value rises.
