Direct answer
Repaying a Help to Buy equity loan with a second charge: England and Wales
A Help to Buy equity loan is secured by a second charge behind the client's mortgage. In England, repaying it in full needs no permission from Homes England. Borrowing more to repay part of it does need permission, and any part payment must be at least 10% of the home's market value.13
In Wales, Help to Buy (Wales) Ltd must approve any additional borrowing, but no permission is needed to borrow to repay the equity mortgage in full. Both schemes need a RICS valuation, valid for three months.5
Key points
- The equity loan is itself a second charge. A new second charge that repays it in full takes its place.
- England: full repayment needs no permission. Part repayment with extra borrowing does, at a minimum of 10% of market value.
- Wales: extra borrowing is limited to the redemption amount, and Help to Buy (Wales) Ltd must approve part repayments.
- The amount owed follows the home's market value, so a RICS valuation sets the figure.
- Interest starts in year six and rises every April, by RPI plus 1% or CPI plus 2% depending on the scheme.
01
Why clients ask
Equity loan interest starts after five years. Under the 2013 to 2021 scheme in England it begins at 1.75% of the loan and rises each year by RPI plus 1%. Under the 2021 to 2023 scheme it rises each April by CPI plus 2%. Help to Buy – Wales uses CPI plus 2% too.347
The rise compounds on the previous rate rather than adding percentage points. The Welsh guide's own example takes 1.75% to 1.83% when CPI is 2.5%. A small rate, but it never falls, and the loan balance itself moves with house prices.7
Many of these clients are on a fixed rate with an early repayment charge. Replacing the whole mortgage to clear the equity loan can cost more than it saves, which is where a second charge comes in.
02
England: the Homes England rules
Homes England's guidance is direct: if the client is repaying the equity loan in full, they do not need its permission. To repay part of it when remortgaging, they need permission to change mortgage provider or increase the existing mortgage.1
Additional borrowing is only allowed to repay part or all of the equity loan, to fund approved structural alterations or to fund a transfer of equity. The loan to value normally cannot exceed 75% unless part of the equity loan is being repaid, and borrowing more is not allowed in negative equity.2
| Rule | What Homes England says |
|---|---|
| Minimum part payment | At least 10% of the home's market value |
| Minimum left outstanding | No less than 5% of market value |
| Valuation | RICS report, valid for 3 months, sent within 5 working days of issue |
| Expired valuation | A desktop valuation from the same surveyor extends it by 3 months |
| Administration fee | £200 to repay all or part of the equity loan |
03
Wales: Help to Buy (Wales) Ltd
The Welsh scheme is run by Help to Buy (Wales) Ltd, based in Cardiff, for the Welsh Government. Its post-completion guide says it must approve any additional borrowing, and that its policy is to consider further borrowing only for set reasons, the first being a partial payment of the equity mortgage. No permission is needed to borrow to pay it back in full.5
Where it does approve borrowing for a part payment, the extra borrowing is limited to the amount of the part payment. After a part payment the balance left must be at least 5% of market value, and the RICS valuation must reach it within 14 days and is valid for three months. Interest-only first charge mortgages are not permitted.56
04
Where a second charge fits
The clean case is full repayment. The new second charge pays off the equity loan at completion and takes its place behind the existing mortgage, which stays on its current rate. No permission is needed from Homes England or Help to Buy (Wales) Ltd for that. The first-charge lender's consent may still be needed under the mortgage terms.15
Part repayment is harder. Both schemes restrict additional borrowing and expect to approve it, and the published guidance does not address a new lender taking a further charge while the equity loan stays in place. Treat a part repayment funded by a second charge as one to discuss with us before the client spends money on a valuation.
The comparison still needs doing. A second charge rate is usually higher than the first mortgage, but it is fixed in pounds, while the equity loan balance rises and falls with the property. Set out the total cost of each route over the same period, with every fee, and record the client's view on house prices and how long they plan to stay.
05
What to collect
These are the details that decide whether the case works.
- Which scheme: England 2013 to 2021, England 2021 to 2023, or Wales, and the purchase date
- The equity loan percentage and the latest redemption statement
- The first mortgage lender, rate, fixed-rate end date and early repayment charge
- A recent estimate of value, ahead of the RICS valuation
- Whether the client wants to repay in full or in part
- Income and commitments for affordability on the new loan
Common questions
Questions answered
Can a second charge be used to repay a Help to Buy equity loan?
Yes, where the new loan repays the equity loan in full. In England, Homes England says full repayment needs no permission. In Wales, no permission is needed to borrow to repay the equity mortgage in full. Part repayment funded by extra borrowing needs the scheme's approval.
What is the minimum Help to Buy part repayment?
In England, at least 10% of the home's market value, leaving no less than 5% outstanding. In Wales, the balance left after a part payment must be at least 5% of market value, and the Phase 3 extension guide sets a first part repayment of at least 10%.
How long is a Help to Buy RICS valuation valid?
Three months in both England and Wales. Homes England needs it within 5 working days of issue, and Help to Buy (Wales) Ltd within 14 days.
Does the first mortgage lender need to consent?
Possibly. Consent depends on the first mortgage's terms and any restriction on the title. Our guide to first-charge lender consent explains how to check.
Evidence
Sources and review
Material factual claims were checked against the primary and public-interest sources below. Product criteria and the wider market can change after the review date.
- 1How to repay your equity loan when you remortgage
Homes England, GOV.UK. No permission for full repayment, part payment limits, valuation validity and the £200 fee.
- 2How to remortgage your Help to Buy home and borrow more money
Homes England, GOV.UK. Permitted reasons for additional borrowing, the 75% loan to value limit and negative equity.
- 3Homebuyers' guide to the Help to Buy equity loan (2013 to 2021)
Homes England, GOV.UK. The equity loan as a second charge, the 10% minimum repayment and RPI plus 1% interest.
- 4Homebuyers' guide to the Help to Buy equity loan (2021 to 2023)
Homes England, GOV.UK. CPI plus 2% interest from year six and limits on further borrowing.
- 5Help to Buy – Wales post completions guide
Welsh Government. Approval of additional borrowing, the 5% minimum balance, valuation timing and interest-only restriction.
- 6Help to Buy – Wales: frequently asked questions
Welsh Government. Additional borrowing limited to the redemption amount.
- 7Help to Buy – Wales buyer's guide (Phase 3 extension)
Welsh Government. CPI plus 2% interest, the worked example and the 10% first part repayment.
- 8Help to Buy – Wales
Welsh Government. Applications must be submitted by 31 March 2027.
Published 1 November 2026. Last reviewed 1 November 2026.