Mortgage repayments

HungryHippos

HungryHippos

HungryHippos

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If I wanted to buy a place for approx 120k, and I had a deposit of 60k, what would my monthly repayments be roughly? I understand you can get good deals with a good deposit, i'm just trying to figure out how much i'd need to spend every month :)

Thanks!
 
Sorry guys, maybe I wasn't totally clear, what kind've interest rates should I be able to get with this much of a deposit? I am going to investigate it myself as well just want an idea, can then look at length of term etc as well.
 
I just had a quick look at this and it seems that most places doing first time buyer deals don't even show what a 50% LTV would be in terms of rates.

Having 50% of the deposit basically puts you in a massively good position with most lenders. More lenders open up to you rather than the usual "first time buyer" crowd. Your advantage would be pretty massive and you can play it to suit you completely. No lender is going to scoff at £60k going their way.

It's not all based on deposit though. What do you feel comfortable with? Would you rather go for a 4 year fixed deal or 2 year fix deal and look at changing up at the end of the term?

Do you want to know exactly what you are going to pay each month (Fixed rates) or do you want to play the market a bit and go tracker. The down side is that it can and will change and you have to be able to pay the difference.

Do you want to pay interest only and pay off the capital at your own freedom? This would make the payments relativley small as you'd only be paying the monthly interest on the loan, but then you can chuck whatever you want at the captial each month. I'm not sure about early repayment fees on these types of mortgage.

If you want a more secure mortgage then capital and interest on a fixed term is what I and many other first time buyers go for. You might pay a little more over time here and there but you can always repay more if you want. The benefit is you know exactly what you're doing for the fixed term, i.e - 4 years. So you know for example £700 a month is going out towards mortgage. Set in stone, un touchable for that period. It's a piece of mind and a target. You can overpay on it too (within lender restrictions on a yearly amount) which massivley dent the capital in which you owe and therefore affects the interest amount and overall lowers your payments over time).

A ballpark figure though, if thats all you want, depending on your decisions I guess would be £400-600 a month.

It really does depend on what you do though mate.

L4D tonight? :D
 
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Usually the brackets, of mortgage payment rates, change on 5, 15 and 25%.

So if you pay 5% deposit they won't offer you a better rate APR unless you can pay 15% up front.

It's the main reason you'll see most people trying to pay a 25% deposit to get the best rates.

Not directly what you asked but if you're thinking of buying a place here's what I did to find out what I could afford.

Think not so much about how much money you have now, but think how much you can afford to pay back.

So say you can comfortably afford to pay back ~£550 a month.

Put some numbers into here (http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator) with a standard APR of say 4% (worse case scenario) and keep changing them until you are paying back what you can afford each month.

You should end up with something in the region of being able to borrow ~£105000.

Add £105000 to whatever deposit you have (£60000) and you have £165000.

Now what I did was take off about £4 to cover my legal fees as well as moving and furnishing costs. So to be on the safe side I'd say take of £5K to cover all your costs.

So if you were willing to pay ~£550 (actually £554) a month then with £60K deposit you can afford to be looking at houses in the region of £160,000.

Hope that helps! :)

Roy

EDIT:: Worth pointing out that rates from lenders change on a daily basis and looking at something now it's likely it won't exist in 2 weeks time. There's also talk of the banks getting rid of fixed rate mortgages at the moment due to the predicted bank of England increases.
 
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HSBC until recently were doing 1.59%+base for <60% (their lowest bracket). Not sure if they still are as trend is slightly upwards, will be roughly similar though.

So the £60k you'd be borrowing would cost circa £100pm in interest, plus whatever capital repayment you wished to do.
 
Jez said:
HSBC until recently were doing 1.59%+base for <60% (their lowest bracket). Not sure if they still are as trend is slightly upwards, will be roughly similar though.

So the £60k you'd be borrowing would cost circa £100pm in interest, plus whatever capital repayment you wished to do.
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Out of my own interest, do interest only mortgages work the same as repayment ones - by usually having a cap on the amount you can overpay back a year?
 
clv101 said:
How does the concept of overpaying work with interest only?
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Overpaying towards the capital I guess. That's what I'm asking. I have a capital/interest mortgage so not sure on Interest as it never really appealed to me.

I guessed there would be no restrictions but if I were a lender and some one signed up for that and then massively overpaid in a short time I'd be concerned I wasn't getting as much as I could out of the deal.
 
Cheers guys, Knubj3 yes i'm up for some L4D tonight :)

The kicker here is that some of the deposit is from the bank of mum and dad, so i'd like to be able to comfortably pay them back first, then eat into the capital on the mortgage itself if that makes sense.

Deposit will be £30k of my own hard earned green, with probably 20-30k from the bank of mum and dad as a loan.
 
Sounds like interest only would be a good option. Pay back the mortgage lender minimal amount at the start.

So say you got for a 15/20 year mortgage. The first 5 years or whatever pay back the absolute minimum you have too ~ £150 max probably to the lender. Nothing is going on capital you are just paying interest off on the loan.

Pay back Ma+Pa as quick as possible as much as you can until thats paid off. Then once that's done for the last 10 years of the mortgage destroy the capital with over payments.

Having said that, might be worth paying £300 a month back to the bank, so they get their interest the value of the interest again against the capital (keep chipping away at that slowly) whilst paying your parents at the same time.

Depends on priority but bare in mind depending on how long the mortgage is for, what you fix in at, etc, the rate may change and more than likely go up as they are quite rock bottom at the moment. Although it won't affect you as much because you'll get a top rate anyway, the payments for interest only wont increase THAT much and your parents are more than likely going to be reasonably flexible with what you pay back.
 
Seems like it would be best to pay off some of the interest, and yeah agree about chipping away at the interest too if I can manage it. Want to pay off the rents as soon as I can though as they will need the money back for retirements etc so don't want to leave em hanging as it were.
 
Knubje said:
Out of my own interest, do interest only mortgages work the same as repayment ones - by usually having a cap on the amount you can overpay back a year?
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Each agreement will have its own terms.

The HSBC tracker I/O producs as in my example have no cap on any form of repayment, you pay whatever you like, when you like.

If you can get a product like this, then there is no reason to take anything else. Capital repayment products tend to be more accessible, but usually are not as flexible and they force a low capital repayment from you each month - which is rather pointless, you may as well manage the repayment yourself.

So taking this route and with the rate mentioned you would pay (on a £60k loan as in the OP) ~£100pm in interest as a forced repayment. You would then top this up by whatever you feel comfortable with as a capital repayment. If you for example wanted to repay this £60k over 120 payments (10 years), you would pay £500, so a total of £600pm at current rate. Obviously interest tails off over time.
 
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Er, hold the press.. the point and purpose of an Interest only mortgage, is that you only pay the interest. If you pay more than this, you are paying off the capital - thus not interest only.
 
Dj_Jestar said:
Er, hold the press.. the point and purpose of an Interest only mortgage, is that you only pay the interest. If you pay more than this, you are paying off the capital - thus not interest only.
Click to expand...

Jez said:
Each agreement will have its own terms.

The HSBC tracker I/O producs as in my example have no cap on any form of repayment, you pay whatever you like, when you like.

If you can get a product like this, then there is no reason to take anything else. Capital repayment products tend to be more accessible, but usually are not as flexible and they force a low capital repayment from you each month - which is rather pointless, you may as well manage the repayment yourself.

So taking this route and with the rate mentioned you would pay (on a £60k loan as in the OP) ~£100pm in interest as a forced repayment. You would then top this up by whatever you feel comfortable with as a capital repayment. If you for example wanted to repay this £60k over 120 payments (10 years), you would pay £500, so a total of £600pm at current rate. Obviously interest tails off over time.
Click to expand...


This is how most would structure an I/O agreement.
 
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