FTB anyone know of a better deal please!?

JamPam

First time post, please help us My fiancee and I buying a house for 103.500 we have been offered a fixed rate at 5.84 (4 years) to borrow 86,400 the deposit is for 17,100 the morgage is for 34 years , with Abbey plc. Please please can anyone help us find a better deal? Thankyou

CloudCuckooLand

Lots of threads asking for best deals, as people shop around, but few of them appear to consider the impact of having such a long term.

Perhaps as FTB you don't appreciate the maths involved.

Using http://www.calculator.net/amortization-calculator.html
(ignore that it is in dollars, the maths is the same, and its seems a good one as it gives a summary)

You will pay £112,611, in interest over 34 years. A total of £199,011 including the capital.

Change the term to 25 years, and the interest will drop to £78,077. A total of £164,477 including the capital.

i.e. save yourself £34,534, just by having what used to be a 'normal', instead of long, term.

If you shopped around and manged to find a rate 0.5% lower, that will only save you £11,000, by comparison (assuming the rate gain stayed constant for 34 years)

Play with other lengths of term on the calculator, even cutting the term by just 2 years to 32 years will save £8,000.

Its not strictly what you asked for, but it would not be very MSE to ignore the fact that prolonged interest is a bad thing.

JamPam

Thankyou for your reply, I did have a bit of an issue with the length of the term (didn't realise quite how much) too which is why I am asking your lovely selves for some advice for something better (since I've also read about abby's admin problems).

This is our first house buy, it is a god send that you guys are here because we can see a record of your responses and advice and how you moderate each other too, we can trust in your advice :):).

We weren't given much of a choice because of our current joint earnings. This is the best London and Country could offer for our currently joint income of just 22,700. This was just before the changes to Britannia BS and The Post Office were put in place.

Apparently our COL has contributed to this figure (which is below average - we said 20 pounds a week for food and only one car. We have no credit cards, never have, no bad debts.


In a year's time - once I have finished my diploma I will be doing a lot more hours, my earnings are usually more but I had to cut my hours to fit this course in.