Help with costing a mortgage

asharon

Hi. The amount for a mortgage is £460 per month with a 10k deposit(possible 20k) .What Ineed help with is calculating how the market fluctuates. I know I can afford a 100k mortgage and go to about £469 a month but then how much would it jump to after the five year discount period and how much can the interest rates fluctuate ?

Ideally what I would like to know is how much can I borrow if you forget about other factors such as income for a second if I can afford £460 a month but don't it to go above that by say taking into account the highest interest rate over the last ten years or so.

Thank you.

dunstonh

It could be double the current rates potentially. Indeed, in the 90s, it was more than double the current rates.

Although in the short term, no-one is expecting double the rates, it is fair to budget for half as much again as that certainly is possible.

Joe_Bloggs

@Asharon.
Where are you getting the figure £460 a month from for a £100K mortgage ? A forty five year term at 5% interest would get you close to those numbers on a repayment mortgage.
J_B.

asharon

The amoount was for a first time buyer discounted for five years over 35 years term which is why I was wanting to know how much more it could be.

Joe_Bloggs

You are very wise to ask. Unfortunately I have no idea. Who is the deal with and what is the deal ? Are you tied into the deal after the good part of the deal vanishes ? There are often subtle penalty clauses that can make a good deal a waste of money.
J_B.

jamesd

It's not possible to say what the amount will be after the fixed term because that varies with the mortgage deal and you haven't said what the interest rate is after the fixed rate ends. That information (both interest rate and new monthly payment amount) should be in the KFI for the mortgage.

A five year discount deal is likely to rise to about 6.5%, to SVR, with a tie-in period with penalties to try to make it costly to switch.

Assuming a 4.3% initial rate for 35 years for 100,000 borrowed, you'd have about 93,000 still owing after five years. 93,000 for 30 years at assumed SVR of 6.5% would make the monthly payments 588.

I suggest saying the name of the lender and even better posting the link to the specific mortgage you're considering. Also say how much you earn before tax, how much you'r epaying on loans and extended repayments for credit cards and whether you expect your income to rise and by how much. That should give the brokers here some guidance on what options might be appropriate.