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Languages...When do I Begin Paying Fees?
You will begin paying your fee after five years of owning your home, at the start of the fifth year after your completion date. The fee gradually increases so you pay nothing in years one to five. You then pay:
- 1.75% on the financial help you received from the HBD scheme
- Fees increase annual by RPI plus 1%
- RPI - The Retail Price Index is an indicator of inflation. It measures the average change from month to month in the prices of goods and services purchased in the UK
After five years a fee is payable of 1.75% on the HomeBuy Direct assistance. This rises annually by the RPI plus 1%. This is payable to us.
The example below shows how fees are calculated. The fee payment is not made for the first five years. After this date a monthly fee will be payable and the table below illustrates how this would work on HomeBuy Direct equity loans totalling £60,000.
| Start of year | HBD assistance | Estimated RPI% +1 | Fee % | Annual Fee Due | Estimated monthly payment |
|---|---|---|---|---|---|
| 1 | £60,000 | 6% | 0% | - | £- |
| 2 | £60,000 | 6% | 0% | - | £- |
| 3 | £60,000 | 6% | 0% | - | £- |
| 4 | £60,000 | 6% | 0% | - | £- |
| 5 | £60,000 | 6% | 0% | - | £- |
| 6 | £60,000 | 6% | 1.75% | £1,050 | £88 |
| 7 | £60,000 | 6% | 1.86% | £1,113 | £93 |
| 8 | £60,000 | 6% | 1.97% | £1,180 | £98 |
| 9 | £60,000 | 6% | 2.08% | £1,251 | £104 |
| 10 | £60,000 | 6% | 2.21% | £1,326 | £110 |
When you originally bought your HomeBuy Direct home your mortgage and any deposit you contributed would have been for a certain percentage of the property’s value (this would be equal to at least 70%). The rest was made up with assistance from the HomeBuy Direct loan. You will pay fees on the loan you received.
