Customers who currently have an equity loan with Metropolitan Thames Valley Housing (formerly Thames Valley Housing or Metropolitan Housing Trust) can find information below about how to repay their loan. Please note that MTVH no longer offers equity loans and that this information only applies to current equity loan holders.
Repaying your Equity Loan
Repaying your equity loan is also sometimes referred to as “redeeming” your loan. You can repay your equity loan at any time. This can be done in either of two ways:
- By selling the property and paying back the equity loan upon sale completion, or;
- By raising funds, e.g. remortgaging, to cover the additional cost you will need to repay the equity loan
Most equity loans can only be repaid in full, ie, the full percentage all in one single instance. One particular scheme called the MyChoiceHomeBuy scheme allows for part redemptions which means that you can repay your equity loan over a few of instances, at a minimum of 10% each time. You will incur costs for each instance you redeem, therefore it is in your interest to repay as much as you can afford to in as few instances as possible. If you pay an interest fee on your equity loan and you part-redeem your monthly interest payments will be adjusted accordingly.
* The loan remaining on the property after partial redemption cannot be less than 10%
The amount you pay back when you redeem your loan is calculated on the current market value of your home. This means that if your property’s value has increased, you repay the share at the new market value.
Steps to repay your loan
If you are repaying the loan without selling, you will need to instruct a RICS qualified surveyor to carry out a valuation on your home. Once you receive the valuation report, please send this to us with the enclosed Equity Loans confirmation form.
If you are selling your home, once your home is under offer we will then need to receive the Equity Loans confirmation form with a RICS valuation report supporting the sale price and memorandum of sale.
We have a panel of RICS surveyors you can use and these are provided at the end of the guide. You are not obliged to use them and they are independent from MTVH.
Once we have the RICS valuation, we work out how much you need to repay to us. The valuation report must meet our criteria and we need to check that it accurately reflects the value of your property.
Please read our Valuation guidelines below before instructing a valuation.
A redemption statement will be sent directly to your solicitor along with our requirements. The redemption statement provided includes all the information required by your solicitor leading up to completion.
They will be required to sign the Solicitors Declaration Form acknowledging they agree to our requirements. Please note that without the signed declaration form, the redemption will be delayed.
From this point on, your solicitor will liaise with us and confirm when the payment has been made.
Frequently Asked Questions
How is the redemption figure calculated?
The amount you have to pay back is based upon the market value of your home at the time you wish to repay your loan – not the original value from when you purchased the property. So, for example, if you are repaying a 25% loan and your property’s current value is £200,000, you would pay us an amount of £50,000. This means that if your home has increased in value since you purchased, you will need to repay the share at the new market value.
What costs will I be expected to pay?
In addition to the valuation fee and any additional fees associated with valuation updates, you will have to pay for your own solicitor’s costs and also an administration fee of £175 to us. There could be other costs relating to your mortgage that you could be responsible for and we advise you to check for these with your lender or solicitor.
How long is each valuation and subsequent update valid for?
Each valuation is valid for a period of three months.
If you wish to alter the property structurally, you may do so provided we give consent and all statutory consents are obtained by you (e.g. planning permission). If eligible, you will be able to keep 100% of any increase in your property’s value that has resulted from structural improvements. This amount will be deducted from the amount owed to us. Please contact us for the Home Improvement Guideline.
Please note that MTVH will not take into consideration any money spent on cosmetic works, such as a new decoration/bathroom/ kitchen etc.
ONLY STRUCTURAL WORKS WILL BE CONSIDERED.
When you decide to redeem the equity loan you will need to provide the surveyor with a copy of the Home Improvements approval letter sent to you by MTVH detailing what can be taken into consideration. The surveyor will then provide two valuations:
- The current market value of the property
- The value of the property excluding the value uplift as a result of any work pre-approved by MTVH
- The amount you have to repay will be calculated on the value, excluding any uplift in value as a result of the approved works taking place
Please note, if consent was not provided at the time of carrying out works, the uplift will not be considered at the time of redeeming your equity loan.
You can read and download our guide on repaying your equity loan below:
Equity Loans Complaints Policy (Last updated: Aug 2017)