What would you do?

mantamark

If you were in this situation...

Flat for sale, expect to get 100k for it.

Will have 55k deposit after current mortgage is paid off (and stamp duty, fees are factored into this)
Want a house that is 135950

So need a 81k deposit.

No bad credit, decent wages (20k & 24k joint application)

I was looking at 10 and 7 year deals, but thinking 5 years may be better?

What sort of mortgage would you go for, and why?

Thanks.

mark.

bacard1

Depends how long you were looking at the mortgage for (and when you say 81k deposit i assume you mean 81k mortgage) and if you like security etc.

My mortgage deal runs out in Jan, and i will be looking at a 10 year fix (if they allow overpayments). Most svr are at 4ish so to be able to fix @ 5.29 for ten years looks like areasonable bet for when the rates start to rise

mantamark

ah yes, minor error there! 81k loan will be required.

Will be a 20 year term, we dont plan on moving again, this will be "the" house, but who knows what the future will bring?

I've seen a few 10 year deals, i think the Brittania one looks the best, 5.49% with no setup fees, but does have £150 valuation fee and £400 legal fees.

Overpayments -

The product in this illustration has an early repayment charge period, as explained in section 10. During the early
repayment charge period, you can make overpayments of up to 10% of your previous year end balance each year,
or 10% of your opening balance up to 31st December during the first year, without incurring these charges. Your
previous year end balance can be found in your annual mortgage statement.
All payments (including any overpayment) will be applied to your mortgage account on the date of receipt, and the
balance you owe, and the amount of interest charged is recalculated and reduced immediately.

But my fianc! is worried a 10 year mortgage is too long, so she would prefer a 5 year deal. Again, Brittania have the best deal for us i think.

Just wanted to see what other people would choose if in our situation.

bacard1

I think Brittania is portable (you still have to meet the lending criteria), an i personally think that you might loose for a couple of years but long term interest rates will get higher. When i moved in Jan 09 i was paying 6.5%, so not that long ago. I have no plan on moving and will know what the payments are for 2/3rds of my remaining mortgage

dimbo61

Just put your figures through "whatsthecost" and the 10 year fix at 5.49% would cost you £556 a month for an £81K mortgage.
The 5 year deal at 4.79% works out at £525 and if you and your OH do go for the 5 year deal please overpay the £30 a month you will save by taking the shorter term! GOOD LUCK