Mortgage question
How do I pay off my Help to Buy equity loan in 2026?
To redeem your Help to Buy equity loan you pay back the same percentage of your home’s current market value — not the original price. You’ll need a RICS ‘red-book’ valuation (£300–£600, valid 3 months), a Target HCA admin fee of around £200, solicitor fees, and the funds from savings, a larger remortgage, or a sale. Partial redemptions are allowed in 10% chunks.
What am I actually paying back?
You’re paying back the same percentage Homes England loaned you, but calculated against today’s market value. So if you took a 20% equity loan on a £250,000 home in 2019 and the property is worth £310,000 in 2026, you repay 20% of £310,000 — that’s £62,000, not the £50,000 you originally borrowed. House-price growth works against you on redemption, and it’s the single biggest surprise for buyers coming up to year 6.
If the property has fallen in value, the percentage still applies — you’d repay less than you borrowed. That’s rare in most regions in 2026 but possible in pockets where 2021 new-build premiums haven’t held.
What’s the step-by-step process?
The redemption process runs through Target HCA (the government’s administrator) and takes 8–12 weeks end-to-end if you’re organised.
- Log into your Target HCA account and request a redemption. You’ll get a reference and a list of approved RICS surveyors in your area.
- Book a RICS ‘red-book’ valuation — £300–£600 depending on property size and region. The report is valid for 3 months, so only do this once you know your funding route is lined up.
- Instruct a solicitor (conveyancer) familiar with Help to Buy redemptions. Expect £500–£900 plus VAT for a straightforward full redemption.
- Target HCA issues a redemption statement based on the valuation and calculates the exact sum owed (plus any year-6+ interest accrued if you’re past the interest-free window).
- You transfer funds — from savings, a remortgage drawdown, or the sale completion — and Target HCA releases the charge from your title at the Land Registry.
Target’s admin fee is around £200 in 2026. Don’t forget the Land Registry fee (£20–£45) to remove the second charge.
Worked example — full and partial redemption
Let’s use a real-world setup: £250,000 new-build purchase in 2019 with a 20% (£50,000) Help to Buy loan. RICS valuation in April 2026 comes back at £310,000.
| Scenario | Share being redeemed | Sum owed to Target HCA | Typical funding route |
|---|---|---|---|
| Full redemption | 20% of £310,000 | £62,000 | Remortgage capital raise + savings |
| Partial (half) — 10% chunk | 10% of £310,000 | £31,000 | Savings or modest remortgage lift |
| Sell and redeem | 20% of sale price | 20% × net sale price | Sale proceeds at completion |
Add RICS valuation (£450), Target admin (£200), solicitor (£700 + VAT), Land Registry (£30). All-in fees sit around £1,400–£1,600 on top of the redemption sum.
Partial redemption note: you can only staircase in 10% tranches of the original equity share. So a 20% loan can be halved to 10% in one go; a 15% loan can only be reduced to 5%.
How do most people fund it?
Three routes dominate in 2026:
- Remortgage capital raise — most common for homeowners staying put. You remortgage onto a higher main-loan amount and use the drawdown to redeem. Main-loan LTV is typically capped at 75% when the equity loan is still in place, so you may need to redeem (or partially redeem) as part of the same transaction. See can I remortgage with a Help to Buy equity loan still in place.
- Savings — if you’ve built a cash buffer, paying cash avoids the main-loan LTV cap and any remortgage fees.
- Sale — if you’re moving, the solicitor settles Target HCA directly out of completion funds. See how to sell a house with a Help to Buy loan.
Run the affordability sums on our remortgage calculator and compare capital-raise scenarios.
Why timing matters
Year 1 to year 5 of your equity loan is interest-free. From year 6 onwards Target charges 1.75% + CPI (for 2021+ loans) or 1.75% + RPI (for pre-2021 loans). With CPI at 3.0% in April 2026, year-6+ loans are accruing interest at roughly 4.75% on a balance that tracks your home’s value. Most buyers from the 2018–2021 cohort are either in year 6+ already or coming up to it, which is why redemption volumes are running high in 2026. For a deeper look at the financial trade-off, see should I pay off Help to Buy before interest kicks in.
Common misconception: “Redemption is based on my original purchase price”
It isn’t — it’s based on a current RICS valuation. That’s why redemption costs more than people expect in a rising market. The valuation must be from a surveyor on Target’s approved panel, carried out to RICS Red Book standards, and the redemption has to complete within 3 months or you’ll need a fresh valuation. Information, not regulated advice — talk to a qualified mortgage adviser and solicitor before redeeming.
Sources
Information, not regulated advice. Mortgage Notes is not an FCA-authorised mortgage adviser. For a recommendation on your specific circumstances, speak to an FCA-authorised broker.