90% Mortgage!!!

beefio

Glad you got that sorted one out...I though you were going to come to blows!

I've checked with the Teacher BS and they have the following available at 90% LTV with a £799 fee and a refundable valuation on completion:-

5 Year Fix - 5.89% - £1,681 p/m

Bearng in mind the Early Repayment Charges is 5% there is also a

3 Year Fix - 5.69% - £1,632 p/m which would give the option to then remortgage.

This compares to the Clydesdale SVR at 4.74% - £1,486 p/m £999 fee £390 valuation.

So £195 p/m more, for peace of mind for 5 years.

Any thoughts?

lukekelly_2

It wouldn't take much more for the variable rate to be more expensive. Take the following scenario.

• Variable rate stays at that level for 3 years and then increases to 8% for the last 2 years.
• For those first three years you overpay with that extra £195 p/m
• After that you just pay the standard amount

Then after the 5 years you end up in an almost identical position to the fixed rate. (Actually you'd be slightly worse off, but it's not far off.) If their variable rate was higher than that scenario over the 5 year period then you'd end up worse off. If it remains at the current level, a dubious proposition, then you'd end up significantly better off.

It's your pick as to what value you place on risk, but that's not an enormous discount for the added risk you'd be taking, 5.89% is still relatively low compared to long term trends. Don't think of it as just peace of mind, because if it goes wrong you don't just have a worried mind you also have less money! It'd mean some chance of ending up better off, some chance of ending up in a similar situation and some chance of ending up worse off, including a non-zero chance of not being able to afford the payments. You do of course get peace of mind with a fixed rate and that has some value too, but it's changing from a guaranteed scenario to one with an element of chance, both positive and negative, that you'd be paying for if you went with that option.

woody252506

pixiepie99 wrote: »

Oh ok. It's just that the way you wrote it, it sounded like I had said it was a good time to buy houses when I'd actually said the exact opposite. If you'd said "Pixiepie is right. However, I think..." it would have made more sense.

I had posted twice and you were referring the the second post. If you had quoted this, it would have been clearer exactly what it was I had said that you were agreeing with.

If you read through the thread I think you will see what I mean

No problem!

Re read and I can see where the confusion was.

For the record pixiepie99s advice regarding almost certain future house price falls and not borrowing more than you can afford is what i agree with.:D

As i said earlier, IMO (Im a FTB too so i am in the same situation) buying somewhere now is a good idea if you can COMFORTABLY afford the amount you borrow and you can knock a considerable percentage of what the house's asking price is. Me and my partner on our salaries could borrow up to around £150k but we are not spending anymore than £100k on a house and therefore our mortgage amount wont be above £90k or £550 a month.

30% would be a good amount, and I appreciate people say things will drop further but if its somewhere your buying as a home for the long term then this wont be as much of a factor.

OK in the next year or two it could well go down more but it could be a lot worse! Friends of mine bought last summer and the summer before at real peak prices so the hit on people like that will be much more noticeable than on someone buying now and getting a big discount on the actual asking price.

:cool: