Speaking to brokers at The Mortgage and Protection Event 2013, Castle Trust senior adviser Matthew Wyles said after five years, Help to Buy equity loan borrowers will feel “a drain on their budgets.”
He told Mortgage Solutions: “If it is a true equity loan and there are no repayments over 25 years, it is probably realistic to see house price inflation as your mortgage exit.
“But the problem with the government scheme is you have to pay interest after five years and it will ratchet up in the years afterwards.
“The fact they took the equity loan scheme out of mortgage regulation was a particularly extraordinary decision. Just because it was decided by the government does not mean it shouldn’t be subject to regulatory scrutiny.”
Also speaking at the event, Aldermore mortgages director Charles Haresnape said Help to Buy 1 borrowers, like interest-only borrowers, need a plan.
