Interest only or Capitial & Interest

waynebouk

Hi guys and thanks for taking your time to help me.

I`m looking to buy a house in the next couple of months with a 20k deposit for a house worth about 100k.
Firstly would it be wise to get a fixed rate mortage rather than a discount variable etc as the base rate isnt going to drop any more is it.

Secondly People have said to me instead of paying of your mortage and interest only pay of the interest and save whatever you can and put it into a high interst savings account (if you can find one these days) and then pay a lump sum at the end of the year.

I know i can save money as i`ve nearly saved 10k in a year but i`ve looked at some mortages and i seen some that i`m paying of the mortage and interest for about 550pm and the interest mortages are about 330pm. So i dont know i`m currently in rented accom paying 475pm and i know i can afford to pay the 550 pm its just that i dont have a clue what to do. please help

Robert_Sterling_3

Firstly would it be wise to get a fixed rate mortage rather than a discount variable etc
That would depend on:-
What the rate was.
For how long it was fixed.
What happens to the bank base rate throughout the period of the fix.
as the base rate isnt going to drop any more is it.
Is it not. I think it will be dicussed monthly.
Secondly People have said to me instead of paying of your mortage and interest only pay of the interest and save whatever you can and put it into a high interst savings account (if you can find one these days ( Exactly)) and then pay a lump sum at the end of the year.
I would not say that to you.
I know i can save money as i`ve nearly saved 10k in a year
Good for you.
but i`ve looked at some mortages and i seen some that i`m paying of the mortage and interest for about 550pm and the interest mortages are about 330pm.
So i dont know i`m currently in rented accom paying 475pm and i know i can afford to pay the 550 pm its just that i dont have a clue what to do. please help.
You can afford £550.
Pay £550.
I am 100% convinced that the £550 is not made up of £330 interest ans £220 capital repayment.

But of course you have not told us the duration of the mortgage.

In general in the early years the monthly payments are mainly interest and little capital and in later years mainly capital and little interest.

Get a copy from a library of "The Which Guide to buying and selling a house" or some similar title.

Good luck.