Mortgages

I wouldn't even bother looking until you have 20-25%. Don't forget, the more deposit you have the more equity you will have in the house. This will reduce your monthly payments and also give you access to better interest rates.

10% is painful, 5.99% with Natwest is the best deal right now as it has no product fees attached.

I've been saving for the past 2-3 years and am approaching 25% deposit. It will be worth it in the end....
 
Remember that although interest rates are low at the moment, this is going to change, and unfortunately there's only one way they're going to go. Make sure you will be able to afford your mortgage if it hits ~8%.
 
Rates will go up over the next year, and then further increases will continue throughout the next 3-4 years no doubt.

Currently I am sitting on a base +0.39% deal, which is nice whilst the base rate remains so low. Current fixed rate deals are astoundly expensive. Base would have to rise 5.5% before I would consider switching which would be an incredibel increase, but one which will no doubt occur in coming times.
 
Buying a £200k house you'll be wanting at least 15% deposit, so that'll be £30k leaving a loan of £170k. You'll most likely only be able to borrow around 4 x joint wage so you'd need a joint wage of around £42.5k.

Say you can find a 5.5% deal on a 25 year repayment then the £170k loan will cost £1056 a month. If the interest rate went up 300 basis points (which I say is more than likely a few years down the line), then you're looking at almost £1400 a month.
 
Last edited:
clv101 said:
You'll most likely only be able to borrow around 4 x joint wage
Click to expand...

4 times joint with a 15% deposit is highly unlikely these days too. More likely to get 2.5x - 3x the joint salary only.

So with joint salary of £40k that would give a £120k mortgage. Add £25k in savings as a deposit (approx 20% LTV) and you are looking more realistically at a £145k mark for houses.

£200k may be a strech too far at this stage especially if interest rates go up and you have to afford the higher repayments.
 
Couple of hours ago our mortgage was paid off in full and like someone said it's a great feeling.

Have a query though, do all mortgages allow overpayments? We made as much use of this as possible and I thought it was a great thing to be able to do. We will probably move again next year and I'm not sure I'd consider a mortgage that didn't allow overpayments to be made without penalty. Nationwide allowed £500 per month with penalty.
 
Rent for a year first. Living with somebody is rather different to seeing them when you feel like it and if it falls apart its much easier if you are renting than if you've got a mortgage with them.
 
Tachyon said:
Have a query though, do all mortgages allow overpayments? We made as much use of this as possible and I thought it was a great thing to be able to do. We will probably move again next year and I'm not sure I'd consider a mortgage that didn't allow overpayments to be made without penalty. Nationwide allowed £500 per month with penalty.
Click to expand...

It's something you need to check, in my experience most have limits on overpayments during the introductory period e.g. my 2 year fixed rate mortgage only allowed overpayments of 10% of the outstanding capital per year for the first two years. Now I'm on the SVR I can over pay as much as I like however.
 
scorza said:
It's something you need to check, in my experience most have limits on overpayments during the introductory period e.g. my 2 year fixed rate mortgage only allowed overpayments of 10% of the outstanding capital per year for the first two years. Now I'm on the SVR I can over pay as much as I like however.
Click to expand...

Nice, I like the idea of being able to do that. Who's that with if you don't mind me asking?
 
As a general rule of thumb, overypayment / early redemption penalties are more common on fixed rate products, or those with a discounted term (say first 2 years).

When we remortgaged last time I went for a lifetime tracker product as I was expecting to inherit some money and it has no overpayment/ERC penalties, no arrangement/valuation fee, and was also anticipating an interest rate drop (it's gone down from 6.09% to 1.09%). Right now trackers don't look that attractive due to the huge premium lenders are charging which will sting when rates start creeping back up again. If going for a fix I'd be looking at 5 years+ to get good value out of it.

One slight regret I have however is that we went for a shortened mortgage term in order to pay it off quicker, might have been better off simply getting a standard term mortgage and then making overpayments as that would give us more flexibility to drop payments if we need to.
 
Last edited:
Anyone have any advice on this? First time buyer..

Looking at two slightly different price brackets :

200k region - 3 bed semi/townhouse. Some would have an internal garage or shared garage. Would come turnkey/nothing more to do.

250k region - 4 bed detached, 2 reception, garage, good sized garden in a great development. However would need to carpet/tile the place

Now, for both we could stretch to a 20% deposit. Difference between the two would be approx £300 a month in payments.

Should I stretch it and get the best house possible? My feeling is that I am probably likely to want to go for the bigger house at some stage down the line anyway..!
 
I don't think whether or not you need to buy a few carpets should be a major factor in a quarter of a million pound decision.
 
scorza said:
Abbey - their rates are pap compared to HSBC though :(
Click to expand...

Funnily, we just went on a new two year fix with Abbey yesterday. 3.89 % with £125 arrangement fee.

We were on 6.29% with them and we have around 35k equity in a place worth about 160k. I thought we'd be closer to 5% but I'm not going to complain!
 
clv101 said:
I don't think whether or not you need to buy a few carpets should be a major factor in a quarter of a million pound decision.
Click to expand...

Have you costed carpeting/tiling a 1900 sq ft house to a decent standard recently? It's quite a bit of extra cash, one that puts a big dent in a savings fund!
 
You must log in or register to reply here.
Back
Top Bottom