1st time buyers, mortgage AIP

liamg1987_2

Hi everyone,

Me and my girlfriend (22 yo) have been house hunting for the past 3 months now, Weve been agreed a mortgage in principle and have found the house we want.

The house we want is on market at £78k but the estate agent reckons we can get it for £72/74 thousand.

Our mortgage agreement is with Halifax and was a mortgage of £72,250 based on the purchase price of the property being 85,000.

We have 7.4thou which is 10% of the house asking price. Our mortgage is a variable rate as 4.6% and the total comparison is 3.8%.

Our total payable over 35 years is 130 thousand. Can anybody give feedback on this agreement? We know we could save for longer and get a better deal but we really want to get on the market now.

Any advice is greatly appreciated, thanks!

beecher2

Is your rate a tracker which is 4.1% above base rate? If so are you confident you can pay the mortgage when rates climb? If base rates were 5% you'd be paying 9.1% which is pretty frightening.

The term's long too so you'll hardly have paid anything off in the first few years. Danger bells all round I'm afraid.

_Andy_

Agreed with Beecher
35 year term isn't ideal plus what are your plans when the base rate rises?

Have you also saved enough for legal fees, valuation, cost of moving including changing locks, money for decoration, furniture and contingency?

Dom3663

Our mortgage agreement is with Halifax and was a mortgage of £72,250 based on the purchase price of the property being 85,000.


So thats a £12.5k deposit you can afford??
For the better deals I'd advise you to get 15% deposit...the difference between a 90% and 85% mortgage is well worth the extra initial cost...

A variable rate at the minute looks brilliant, but how long would that portion of the mortgage be? 1 year could work in your favour, but anything longer than that and interest rates can only go one way

I've got a 85% LTV mortgage, fixed rate 5.74% with Nationwide. My house price is very similar to yours too

I've heard many people advising against 30/35 year mortgages, but whatever works fr you. For me, its cheaper than renting (excluding house price fluctuations)...and even though alot of the payment is interest atleast SOME of it has value in bricks and mortar

herbiesjp

Try and get the 15% deposit.

Maybe family can help?

I would not want a mortgage at that level on a variable rate TBH. How long are you tied in for?

How much would interest rates need to rise to, before you would struggle with payments?

With a 35 year term you are paying off very little at the outset.