First time buyers just need 20% mortgage what's the best deal?

hermione47

We have just made an offer on a house and it's been accepted. The value of the house is 150K. We need to borrow only 30K, and we would like to repay the sum in 10 years. What is the best mortgage out there, considering we'd rather do without the reservation fee and we'd like the possibility to make overpayments.

Please help, it's so very confusing we're going mad!!!!!!

Treadmill

You could get an unsecured loan for 30K

hermione47

Treadmill wrote: »

You could get an unsecured loan for 30K

Interest rates are much higher than for mortgages:rolleyes:

luckyfool

Abbey tend to be competitive for fee free mortgages for smaller amounts.

Treadmill

hermione47 wrote: »

Interest rates are much higher than for mortgages:rolleyes:

Maybe so, but you don't have all the fees, to pay, extra legal fees, valuation, booking fee etc, taken over a shorter term I reckon a higher interest rate unsecured loan could work out cheaper.

LilacPixie

what bank in the current financial climate would lend 30k unsecured??

Treadmill

LilacPixie wrote: »

what bank in the current financial climate would lend 30k unsecured??

25K from Nationwide 5K from Abbey, might sound silly but bought my mums house which was a right to buy on unsecured loans with the facility to overpay and got it paid off in 68 months, the high APR doesn't matter so much over a term that short, I paid back back about £37,600 which is less than you'd pay on a £29,000 mortgage over 10 years @ 5%

A mortgage seems like a lot of hassle for 30K, I'm not saying this is right in this case, but I'd consider it as an option to avoid the fees and rigmorole if it was me

Bunny_Mad

Hello,
We are in a very similar position. We remortgaged our home which we owned outright, because VERY FEWBanks/BS would give a mortgage for a 2nd/holiday home. (They suggested Buy to let mortgage with HUGE rates! No thanks!)

I ended up going through bbc2 ceefax money pages, writing down all the Banks & BS's & ringing them all (I rang 27 in total!) Post Office had a good 5 year deal. But I ended up with the lowest....4.5% for 10 years, with option to overpay 20% extra per month. The rates have risen since I got it, but I believe its still wortha look. They did have a good 5year deal too. But I think it will take 5years Plus for this climate to sort itelf out, so I would rather have the security of 10 years.

Hope this is of some help.

PS..... I did check & if you make overpayments & the clear the mortgage before the end of the 10 years...there is NO fee. :0)
Good Luck.

luckyfool

Treadmill wrote: »

25K from Nationwide 5K from Abbey, might sound silly but bought my mums house which was a right to buy on unsecured loans with the facility to overpay and got it paid off in 68 months, the high APR doesn't matter so much over a term that short, I paid back back about £37,600 which is less than you'd pay on a £29,000 mortgage over 10 years @ 5%

A mortgage seems like a lot of hassle for 30K, I'm not saying this is right in this case, but I'd consider it as an option to avoid the fees and rigmorole if it was me

Technically, yes you could borrow it unsecured. Unfortunately the level of tight credit scoring on unsecured debt just now means that 9 out of 10 people are going to get turned down for larger unsecured loans like that. Surely better to get a fees free mortgage on a lower interest rate over a shorter term with an overpayment facility.