What is the 5-year equity freeze?
Your boost is an equity loan that is frozen for 5 years. After 5 years, it will step up or down to reflect changes in your property's value.
Your boost is an equity loan that is frozen for the first 5 years after you take out your mortgage. At 5 years, it will unfreeze and begin to move up or down in line with the value of your home – including any increase or decrease in those 5 years.
You are allowed a 6 week grace period at the 5-year mark to give you time, if needed, to arrange a remortgage and pay off your boost.
This means if the value of the property has increased at the 5-year mark, you can still repay the original amount of the boost up until 5 years and 6 weeks after the start of the loan.
However, if the value of the property has fallen, the amount you owe will decrease straight away at exactly 5 years, meaning you could repay less than you originally borrowed right away.
|
End of year |
Assumed house price growth |
Property value |
Boost balance (assuming no repayments) |
|
Year 1 |
+2% |
£200,000 |
£30,000 |
|
Year 2 |
+2% |
£204,000 |
£30,000 |
|
Year 3 |
+2% |
£208,080 |
£30,000 |
|
Year 4 |
+2% |
£212,242 |
£30,000 |
|
Year 5 |
+2% |
£216,486 |
£30,000 |
|
Year 6 |
+2% |
£220,816 |
£33,122 |
|
Year 7 |
+2% |
£225,232 |
£33,785 |
|
Year 8 |
+2% |
£229,737 |
£34,461 |