Overpay on SVR Vs Save up for new deposit????

acs202

We have pretty much got stuck in our new build apartment until house prices have pretty much settled. I am resigned to this (unfortunately!!).

We have just moved to our SVR @ 4.99% with A&L only slighter better than when we fixed @ 5.49% 2 years ago. Based on the Nationwide index our property has fallen from £177k to £140k (ish).

I have been thinking that now we are on SVR is it best to overpay as much as possible - especially as we started on a 35 year mortgage...

OR

consider saving up as much as possible in the hope that we can scrape together around £20k within the next 2-3 years in order to put down a deposit for our next house. This option I would then ask to change our mortgage so we could let it out. I really think our property is worth a heck of a lot more than the £140k as it is a premium apartment. It is also near a major sporting venue (due to become international shortly) which I also hope may improve the value.

Any suggestions?

MORPH3US

acs202 wrote: »

it is a premium apartment

Get ready for the barrarge....:o

pixiepie99

So you're saying you want to transfer your current mortgage to a BTL one and get a new mortgage on a new home with your deposit?

Problem is, to change your current mortgage to a BTL one, a lender will require you to have equity in it or a deposit (minimum 15%) From what you've said, I'm assuming you have no equity in your flat or are in negative equity.

So... good idea but I don't think it's going to happen.

acs202

Oh I see. You are correct we don't have enough equity to change to BTL. I'm just stuck on what we can do. Guess its overpay as much as possible....

dimbo61

Yes thats the best idea
The more you reduce your debt the less you owe the lender and hopefully the market will improve.
You will not get 4.99% from any investment at the moment ( without high risk! ) so overpay the mortgage ( if allowed ! ) and enjoy your new home GOOD LUCK