Mortgages - how much to borrow

Todge said:
I doubt it.

And borrowing isn't hard, its responsible which is what it should be. You shouldn't be able to buy a house unless you can put a substantial deposit down. If you cant put that down you need to examine what's going on.

My brother (22) rented a flat for 9 months, loved it and decided to move back home with mum and dad to save up to buy somewhere of his own. That was a year ago. In a years time he'll be buying a 3 bed place in the south east somewhere and probably putting down 30-40k as a deposit with his GF.

The entire world got screwed up by giving loans to people who couldn't afford them. Finally there is a modicum of common sense being applied. Though as I said earlier, if you have that deposit, they'll still give you a small fortune regardless.
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That's all well and good if you have somewhere you can live rent free or for minimal costs and can put "rent" money into a savings account etc... This isn't an option for a lot of people unfortunately.
 
ecksmen said:
That's all well and good if you have somewhere you can live rent free or for minimal costs and can put "rent" money into a savings account etc... This isn't an option for a lot of people unfortunately.
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No sadly not. but it IS an option for another large group of people who would rather rent and complain that they cant save than accept that going back to mum and dad who would love to have them back would be FAR better in the long run.
 
Todge said:
No sadly not. but it IS an option for another large group of people who would rather rent and complain that they cant save than accept that going back to mum and dad who would love to have them back would be FAR better in the long run.
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This is what me and my GF are planning to do, will be worth it in the long run.
 
Crizzy said:
Depends on the interest rate and length of mortgage. A repayment mortgage of £50,000 for 25 years at 6% will cost £46,645 on top of the original mortgage bringing the total paid to £96,645, it's obscene.

Edit:

A Very useful excel spreadsheet made by Locoblade at moneysavingexpert can be found in post 1 here: http://forums.moneysavingexpert.com/showthread.php?t=1157173 which shows a complete breakdown of mortgage repayments.
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very useful!! thanks

god you can save so much by paying a little more each month, £50 extra reduced mine by five years
 
Don't know if this is helpful, but... what we do (as a method of overpaying) is to open one of those "Monthly Saver" accounts every year and pay the money we would overpay on the mortgage into one of those. The interest rates for monthly savers are higher than our mortgate interest rate (even after tax - and even better if you can open such an account in your childrens name!). At the end of the year we pay off the lump sum from the account.

We do it this way as it means there is access to the savings (in case of emergency) and, should interest rates start to creep up, you have a cushion of cash to help future repayments without borrowing more...
 
Tiny Clanger said:
Don't know if this is helpful, but... what we do (as a method of overpaying) is to open one of those "Monthly Saver" accounts every year and pay the money we would overpay on the mortgage into one of those. The interest rates for monthly savers are higher than our mortgate interest rate (even after tax - and even better if you can open such an account in your childrens name!). At the end of the year we pay off the lump sum from the account.

We do it this way as it means there is access to the savings (in case of emergency) and, should interest rates start to creep up, you have a cushion of cash to help future repayments without borrowing more...
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are there not restrictions on paying in lump sums like that?
 
Usually (well, in mortgages I've had) you're allowed to pay off a proportion of the loan (on my current mortgage it's 10%) in each year - whether it's overpaying £x per month or a lump sum at year end.
 
We're with RBS and can overpay upto 10% a year. Whenever and however we like. I assume its the same for all RBS mortgages.
 
Gilly said:
Where are you that £175k equates to a 2 bed terrace house? For that I'll be looking at a large 3-4 bed detached in a decent area :)

I'm looking at 5x my salary (£150k-175k). I will be disappointed if I can't get that. I'm off to see an advisor tomorrow so will be able to feed back my findings!
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Seriously, dream on. You'd be lucky to buy a 2 bed flat for that in most areas.
 
Gilly said:
Dream on? How do you mean?

I'm already looking at fairly spacious 3 bedroom houses for less than the figure quoted :confused:
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I hate Dorset :(

Just an FYI, HSBC are doing a fee free lifetime tracker mortgage at gay low rates upto 90% LTV. If you can slip through their strict lending criteria, it's a mortgage worth having.
 
Going back to the OP. You should be able to easily shop around and pick a mortgage with that deposit on a property at 145K - 3 times joint salary. But once you start going above that lenders will fall away and you'll have a restricted choice.

Many lenders use 3.5 times sole and 3 times joint as the starting point, going above that with them may be possible, bu it makes it a more difficult application.
 
Lucero said:
I hate Dorset :(

Just an FYI, HSBC are doing a fee free lifetime tracker mortgage at gay low rates upto 90% LTV. If you can slip through their strict lending criteria, it's a mortgage worth having.
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"Tracks the Bank of England base rate plus 3.79% for the term"

That's great at the moment with a 0.5% interest rate. In a few years when its back at 5% you are going to be paying 8.79%!

Unless you can up sticks and go elsewhere at any time for free i'm not seeing the plus.
 
Todge said:
"Tracks the Bank of England base rate plus 3.79% for the term"

That's great at the moment with a 0.5% interest rate. In a few years when its back at 5% you are going to be paying 8.79%!

Unless you can up sticks and go elsewhere at any time for free i'm not seeing the plus.
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You can, there's no exit fees or redemption penalties on that rate.
 
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