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  • FIRST POST
    • Basic365
    • By Basic365 11th Mar 17, 9:42 PM
    • 1Posts
    • 0Thanks
    Basic365
    Mortgage advice please
    • #1
    • 11th Mar 17, 9:42 PM
    Mortgage advice please 11th Mar 17 at 9:42 PM
    Hi All,

    I am just after some advice on what mortgage option is the best and whether the below is the best option to take. I will start of with some background info.

    I have just bought a new duplex apartment that is classed as a new build, but is a renovation of an old building. For this reason, I have decided to take advantage of the help to buy equity loan.

    I do have the savings to put down a 10-15 % (15% would leave me with hardly any savings left) deposit down myself but have decided to put a 5% deposit down and then take the full 20% of the help to buy equity loan. The reason for doing this is: a) It keeps me more liquid and I can use the spare cash to buy sofas etc. b) It means I get a slightly better mortgage rate as the LTV is 75% instead of 90%. c) I can put my remaining deposit in some sort of savings account and then pay off the help to buy loan in 5 years time, whilst taking advantage of the interest gained.


    Mortgage options

    I am thinking about going for the 35 year, 2 year fixed as the monthly payments are easily payable and I can concentrate on putting any extra money towards paying off the help to buy equity loan within the 5 years, effectively overpaying my mortgage. I guess this option allows me to be more flexible with my money.

    I can afford all the below payments, but the 25yr. 5yr fixed would be at the upper limit. However, it's very likely that my wage is to increase over the next 5 years annually.

    FYI- Below are a list of the mortgage options I can't decide between, all with Nationwide:

    35 years, 2 year fixed (2.04%) @ £374.98

    35 years, 5 year fixed (2.79%) @ £419.98

    25 years, 2 year fixed (2.04%) @ £479.03

    25 years, 5 year fixed (2.79%) @ £521.28

    My questions:

    1) Are you able to go on a 35 year mortgage and then after the fixed period, say 2 years, swap to say a 25yr mortgage or 18yr mortgage etc., without paying a fee?

    2) What option do you feel is the best?

    Thanks for you help in advance
Page 1
    • w00519772
    • By w00519772 11th Mar 17, 9:51 PM
    • 1,126 Posts
    • 202 Thanks
    w00519772
    • #2
    • 11th Mar 17, 9:51 PM
    • #2
    • 11th Mar 17, 9:51 PM
    "Best" is subjective. It depends on your circumstances. How flexible are these mortgages? For example, if you chose the five year fixed, then what would happen if you wanted to relocate (job offer) after 2-3 years? Do these mortgages allow you to 'port' or offer 'consent to let'?

    At the end of the fixed period, then I believe you can move to another fixed rate deal. However, bear in mind that interest rates could be different.
    • Maximum Saving
    • By Maximum Saving 11th Mar 17, 10:14 PM
    • 174 Posts
    • 330 Thanks
    Maximum Saving
    • #3
    • 11th Mar 17, 10:14 PM
    • #3
    • 11th Mar 17, 10:14 PM
    I took out a 25 year mortgage from Nationwide in August 2010. In 2012 my two years was nearly up so I went to see a mortgage adviser. I decided to change from 25 years to 10 years. Therefore I decided to go for a 5 year fixed deal. I wanted to change further reduce the number of years. This has been very difficult to do since mortgage affordability tests came in during 2013. I would suggest the 25 years fixed deal for you with a 5 year fix. Good luck.
    • Rola_cola
    • By Rola_cola 11th Mar 17, 11:25 PM
    • 9 Posts
    • 16 Thanks
    Rola_cola
    • #4
    • 11th Mar 17, 11:25 PM
    • #4
    • 11th Mar 17, 11:25 PM
    We took our mortgage over 30 years and over pay it. If times are lean we can revert to the min payment, but for as long as we over pay we are effectively shortening the term. We find this gives us a good balance of flexibility and affordability.
    • childofbaahl
    • By childofbaahl 12th Mar 17, 2:26 AM
    • 36 Posts
    • 7 Thanks
    childofbaahl
    • #5
    • 12th Mar 17, 2:26 AM
    • #5
    • 12th Mar 17, 2:26 AM
    I'm applying for my mortgage in 6 weeks and will be following along the lines of Rola_cola too, 30yrs but always overpaying when I can to shorten the term by default. Mine will initially be a fixed 5yr which would give stability for a period without being tied in too long.
    • getmore4less
    • By getmore4less 12th Mar 17, 5:45 AM
    • 30,000 Posts
    • 17,929 Thanks
    getmore4less
    • #6
    • 12th Mar 17, 5:45 AM
    • #6
    • 12th Mar 17, 5:45 AM
    That help to buy equity loan could become a noose.

    all it need is a small amount of house price inflation and your saving with interest won't cover it and you end up having to borrow more.

    also look carefully at the costs of paying off that help to buy.

    run the numbers with the higher borrowing now and not having to buy out the share you don't own with say 5% and 10% hpi.

    that liquidity could be expensive.


    longer term with overpayments is usually the best option for most.

    Term just sets a payment how much you pay determines how much it costs and how long it really takes
    • Alifrust33
    • By Alifrust33 12th Mar 17, 11:28 PM
    • 4 Posts
    • 0 Thanks
    Alifrust33
    • #7
    • 12th Mar 17, 11:28 PM
    • #7
    • 12th Mar 17, 11:28 PM
    Valuation to offer time santander!!! Any ideas of timescale anyone!!
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