How to Pay Off Your Help to Buy Loan: The Redemption Process Step by Step

Paying off a Help to Buy equity loan is not hard, but it is a process with a fixed order and several deadlines that do not wait for each other. Most of the redemptions that go wrong do so because something was done too early, too late or in the wrong order, not because anyone was refused.

This guide sets out the process in England from start to finish: the three ways to repay, each step in the order it happens, how long each one usually takes, and the things that hold a redemption up. It is written from the valuer's side of the process. It is not financial or legal advice, and your mortgage adviser and conveyancer will advise on your own case. Help to Buy in Wales is run separately and has its own rules.

What you are actually repaying

The equity loan was a percentage of the price you paid, and you repay that same percentage of what the home is worth when you repay. If you borrowed 20%, you repay 20% of today's value, whether that is more or less than the amount you borrowed.

That is why a valuation is needed every time, and why the administrator checks it carefully. The Help to Buy valuation page sets out what the valuer must do and a worked example of the sum.

On top of the loan itself, the redemption figure includes any interest owed, the administrator's fees and any missed payments. The administrator charges an administration fee when you apply, £200 at the time of writing according to GOV.UK, which is separate from the valuer's fee.

The three ways to repay

Every redemption follows the same steps. What changes is how you fund it and what proof you send.

You can repay all of the loan, or part of it. A part repayment must be at least 10% of the home's market value, and you cannot leave less than 5% of the market value outstanding. Paying off part of it reduces the interest, because interest is charged on the share you still owe.

You must repay the whole loan when you sell, when you pay off your repayment mortgage, or at the end of the equity loan term, which is normally 25 years.

The process, step by step

1. Tell the administrator about anything that could affect the value

Before you contact a valuer, GOV.UK asks you to tell Help to Buy customer services about anything that may affect the value of the home, because they may need to agree which surveyor you use. The examples they give are:

• external cladding on a block of flats, where a specialist valuation may be needed
• a breach of planning permission
• building work that affects the value without the right sign-off, such as a conservatory with no building control certificate

This step is easy to skip, and skipping it is costly. If the issue comes out after the valuation, the report may not be accepted and you pay for another.

2. Get a RICS valuation

The valuer must be RICS qualified and registered, independent of any estate agent, and not related to or known to you. For loans taken out under the 2021 to 2023 scheme, they must also be a RICS member or fellow (MRICS or FRICS). They must inspect inside the home, use at least three similar sales from the last 12 months within two miles, and send the report as a signed, non-editable PDF addressed to Homes England.

A lender's mortgage valuation will not do, and nor will an estate agent's appraisal. If you want the home to show at its best on the day, our guide on how to prepare for a home valuation covers what helps and what makes no difference.

The report is valid for three months from the date it is produced, and it must reach the administrator within five working days of being issued. Those two dates are the start of every timetable that follows.

Chris Bloor, on site

I do these inspections myself, and the one thing I keep telling people is to send me the report the day it lands. It sits valid for three months, but the administrator wants it within five working days of the date on it, and I have seen that short window missed while someone waited for the rest of their paperwork. Book me when your buyer or your offer is close, not before. A report produced too early can expire before the chain moves, and then you are paying for another visit.

3. Instruct a conveyancer

You need a conveyancer for every route, including repaying from savings, because they give the legal undertaking and handle the money. If you are selling, the conveyancer acting on the sale usually does this too.

4. Send the application

The application form goes to Help to Buy customer services with:

• your conveyancer's details and authority for them to act for you
• the percentage you are repaying and how you are paying for it
• the RICS valuation report
• your proof of funds (memorandum of sale, mortgage offer or bank statement)
• the administration fee, and any arrears cleared or a payment plan agreed

The application does not move until everything is in. GOV.UK's checklist is explicit that a missing document stops it.

5. Receive the redemption letter

Once the administrator has everything and no further questions, it aims to send the redemption letter to you and your conveyancer within four weeks. The letter confirms you can go ahead, the percentage you borrowed, and an estimate of what you will repay, including interest, fees and arrears.

6. The undertaking and the Authority to Complete

Your conveyancer sends the administrator a legal undertaking setting out the completion date and agreeing to pay the correct amount. The administrator then issues an Authority to Complete, within five days of receiving the undertaking, confirming the date and the exact figure.

If completion slips by more than a week from the date in the undertaking, a new undertaking and a new figure may be needed.

7. Completion and removing the charge

On completion your conveyancer sends the money, the administrator checks it against the Authority to Complete, and your conveyancer sends a completion statement. Your conveyancer also provides the form the administrator sends to HM Land Registry to remove Homes England's charge from your title. Until the money arrives, keep paying the monthly interest and management fee.

How long it usually takes

There is no published end-to-end time, because so much depends on your sale, your lender and your conveyancer. The table below shows how the pieces usually fit together.

An illustration, not a promise of any timescale:

Read across the table and the pressure point is clear. The valuation is valid for three months, and the redemption letter alone can take a month of that. A sale that is still waiting on a buyer's mortgage, or a remortgage still waiting on the offer, can run past the three months without anyone doing anything wrong.

Timing the valuation

The most useful decision you make in the whole process is when to book the valuation.

• Selling: book it once you have accepted an offer, because the administrator needs the memorandum of sale with the application. A valuation done before the home goes on the market may have expired by the time you have a buyer.
• Remortgaging: book it when your new lender has issued an offer, or is about to. Many mortgage offers last longer than three months, so it is usually the valuation that sets the pace, not the offer.
• Using savings: book it when the money is in your account, so the application can go in the same week the report arrives.

If your report is due to expire, GOV.UK says the administrator will write to you about it. You then have two weeks from the expiry date to ask the same valuer for an extension:

Miss the two-week window and you need a new inspection and a new report, at your cost. Some GOV.UK pages mention only the desktop option, so check with your valuer which they will provide.

What holds a redemption up

In our experience the delays fall into a few groups, and almost all of them can be avoided.

If the administrator rejects a report, you have to provide and pay for a new one. GOV.UK gives two grounds: the report does not follow the criteria, or the figure is too high or low compared with similar homes.

Chris Bloor, on site

More than once I have been called back because something turned up after my visit: a conservatory with no building control sign-off, or a loft room nobody mentioned. If I do not know about it, I cannot reflect it, and a report that misses it can be rejected or leave you repaying on a figure the house will not reach. So walk me round everything on the day, paperwork included. It costs nothing to tell me, and a second inspection comes out of your pocket.

Selling: the higher figure counts

When you sell, you repay your share of the market value or the agreed sale price, whichever is higher. Two things follow from that.

First, accepting a low offer to get a quick sale does not reduce what you owe Homes England, if the valuation says the home is worth more. The difference comes out of your share.

Second, the valuation should reflect the home's real condition. If you know about a defect, tell the valuer at the inspection. If a buyer's survey later turns something up and you agree a lower price, speak to your valuer and the administrator before you complete, because a valuation that did not take the defect into account can leave you repaying on a figure the home will not fetch. Our guide to selling a Help to Buy home covers the wider sale.

Remortgaging: check the numbers line up

A remortgage brings two valuations: your new lender's, for its own lending decision, and the RICS valuation for Homes England. They are prepared for different purposes and can come out at different figures.

The amount you repay is set by the RICS valuation. If your new mortgage was agreed on the basis of a lower lender's figure, the loan may not quite cover the redemption. Your mortgage adviser can usually build in some room for this, which is worth asking about before the offer is issued.

Is now the right time?

Interest starts at the beginning of year six, at 1.75% of the amount you originally borrowed, and the rate goes up every April. For loans taken out from 2013 to 2021 it rises by RPI plus 1%; for loans from 2021 to 2023 by CPI plus 2%. It rises even when inflation is zero.

Interest payments do not reduce the loan, so the longer it runs, the more you pay with nothing to show for it. Against that, the amount you repay follows the market. Whether to repay now depends on your mortgage options, your savings and your view of prices, which is a decision for you and your adviser. A valuation tells you exactly where you stand today.

Frequently asked questions

How long does it take to pay off a Help to Buy loan?

There is no fixed time. The administrator aims to send the redemption letter within four weeks of a complete application, and issues the Authority to Complete within five days of the undertaking. The rest depends on your sale, your lender and your conveyancer, so allow a few months from booking the valuation.

Do I need permission to pay off my Help to Buy loan?

Not to repay it in full. You do need the administrator's permission if you are repaying only part of it as part of a remortgage, because changing lender or borrowing more needs its consent.

What is the smallest amount I can repay?

A part repayment must be at least 10% of the home's market value, and you cannot leave less than 5% outstanding. Below that, you repay the rest in full.

Can I use the same valuation for my lender and for Help to Buy?

Usually not. The administrator will not accept a valuation prepared for a bank or mortgage purpose, and your lender normally instructs its own.

What happens if my valuation runs out before completion?

Ask the same valuer, within two weeks of the expiry date, for an extension letter (one more month) or a desktop valuation (three more months). After that, a new inspection is needed.

Do I keep paying interest while the redemption goes through?

Yes. Interest, where it is due, and the £1 monthly management fee carry on until the redemption completes, and anything owed is included in the final figure.

Getting the first step right

Almost every redemption that runs smoothly starts with a valuation booked at the right moment and prepared to the administrator's checklist. Our Help to Buy valuation service covers repaying in full, repaying in part and selling, by a RICS Registered Valuer independent of any agent. You can ask for a fixed price before you book, and our complete guide to RICS valuations explains the standards every valuation is prepared to. If you are still weighing up whether to repay at all, the Help to Buy scheme explained covers how the loan works over its full term.