How does the OMHB Scheme work?
The scheme involves your client borrowing money from Halifax and a HomeBuy Agent. HomeBuy Agents will manage the money that the government puts into the scheme.
We offer the following mortgage under the Open Market HomeBuy scheme, split into 3 parts:
- A standard mortgage from Halifax. We will charge interest and your client will make monthly payments just like any standard mortgage. This loan will be the largest of the three loans (at 75% LTV). This must be taken out on a repayment basis.
- An 'equity loan' from Halifax. This works in a very different way from the standard mortgage loan. When your client pays off this loan they also have to pay us a share of any increase in the value of their home over the life of the loan. Their home is valued when the loan is due to be repaid and the share is worked out from the increase in value at that stage compared to the value when the equity loan was first taken out. If the value of the property has fallen over the life of the loan, your client will have to pay us the original amount we lent by way of equity loan. We will not charge your client interest on this loan for the first five years. After this time your client will pay interest. The rate they pay is detailed in our product matrix
- Another 'equity loan' from the HomeBuy Agent. As with Halifax's equity loan, the HomeBuy Agent will take a share of any increase in the value of your clients' home when they sell the property or repay the loan. However, the HomeBuy Agent won't ever charge interest and there are no monthly payments.
