The range, which can also be used for a standard remortgage, includes two, three and five-year fixed-rate mortgage loans and offers a £1,000 cashback, which Skipton said could cover the extra legal and administrative costs of paying off the loan, in full or in part, to exit the scheme.
The products offer borrowers the option to ‘staircase out’ of Help to Buy by increasing their borrowing to repay the interest-free equity loan – before the first borrowers are charged interest payments from April 2018.
The government scheme, which launched in 2013, offered a 20% equity loan deposit contribution to buyers of newly-built properties who were able to provide their own 5% deposit.
At term-end, borrowers can repay the equity loan in full or in part by stair casing through a remortgage. Borrowers can also sell the property and repay the loan in full or stay on the mortgage and in their home and begin paying loan interest.
Homes and Communities Agency calculations show a typical buyer in year six with a 20% equity loan on a £200,000 property who decides to staircase to pay half the loan to reduce the outstanding government loan to 10% of the property value, will pay £25,526 after a property value increase of 5% each year. London borrowers have been able to access equity loans of up to 40% of the property value.
Also, after five years, borrowers become liable for an interest fee of 1.75% of the equity loan amount on a monthly basis, rising annually by any increase in the Retail Price Index, currently 4.1%, plus 1%.
Skipton’s new “Hexit” range offers remortgage products at 75%, 85% and 90% loan to value (LTV) across two, three and five-year terms. The two-year fix starts at 2.75% to 90% LTV and the five year fix at 2.99% to 90% LTV.
Kris Brewster, Skipton’s head of products, said: “Skipton’s new Help to Buy Exit products have been designed with the purpose of using that potential house price growth to exit the scheme to full ownership.
“Clearly, there will be remainers and leavers in this first round of ‘Hexit’. Whilst for some, it might be better to stay with help to buy in the short term, others may benefit in the longer term by switching their mortgage and paying off their equity loan.”
According to Moneyfacts, just five mutual lenders are offering 45 Help to Buy remortgage products including Skipton, Newbury, Teachers, Leeds and Newcastle Building Society.
James Chidgey, new homes relationship manager, at mortgage broker, Mortgage Advice Bureau, said: “Skipton is making a very positive statement in the Help to Buy remortgage sector, which will be welcomed by new build advisers, offering bold options for ‘like for like’ loans, ‘staircasing’, and the full remortgage of the equity loan up to 90% LTV, offering a free valuation and £1000 cashback to soften the cost of the switch to the borrower.”
He added that the sector is poorly supported adding this is still a real concern to all involved in the Help to Buy scheme.
Moneyfacts finance expert Charlotte Nelson said very few standard remortgage loans offer £1,000 cashback and the deal could work for borrowers keen to pay off equity or minimise remortgage costs.
“However borrowers should try not be wowed by these headline grabbing incentives and instead they will have to weigh up any incentive package against the rate to ensure the most cost-effective option is to be had.”
