Another lender has followed in Leeds Building Society’s footsteps by making Help to Buy mortgages available for remortgage as well as home purchase.
FTAdviser understands that Teachers Building Society is now only the second lender to offer these kinds of remortgages. In March, Leeds Building Society claimed to be the first lender in the market to accept remortgage applications from Help to Buy equity borrowers.
Ray Boulger, senior technical manager at broker John Charcol, told FTAdviser he was not aware of any other lender offering a remortgage for borrowers with a Help to Buy mortgage, so Teachers would appear to be the second on the market.
“However, some lenders will offer a product transfer for existing borrowers; for example we have experience of Natwest doing this,” he added.
A Help to Buy equity loan is where the government lends up to 20 per cent of the cost of the new-build home, meaning borrowers will only need a 5 per cent cash deposit, as well as a 75 per cent mortgage to make up the rest.
Teachers’ deal is available for people with an existing Help to Buy mortgage, many of whom are coming to the end of a two-year discounted deal.
It has a discounted variable rate of 2.44 per cent for the first two years, which then changes to a standard variable rate of 4.99 per cent for the remainder of the term
It is available for loans up to 75 per cent loan-to-value, with an £899 arrangement fee and £99 application fee. Early repayment charges are applicable, while the remortgage package includes free valuation and £250 towards legal costs.
Jeremy Duncome, director of the L&G Mortgage Club, pointed out that remortgage customers can often be overlooked in these product areas, leaving them on higher rates.
Gemma Harle, managing director of Tenetlime, added: “This is an innovative and welcome move from Teachers and helps address the issue of limited options for consumers after the initial benefit period expires.”