Mortgage-Free ??

Barros

Hi everyone

I am 27 and have a question.

I have been saving for my mortgage deposit, and ideally I would like to have a deposit of about (£50K if possible!!) before looking for a place. So, at worst a 50% deposit. Although ideally my FTB property would be £90K max. So that gives me £10K leeway just in case.

ANYWAY, will a 50% deposit REALLY affect my mortgage term or mortgage repayments that much? I know it seems like such an obvious question but still borrowing £50K is a lot of money. So, would this really save me a lot of cash longterm?

Thanks for any replies guys ...

Engeroosi

it means you will only be paying interest on 50k rather than 100k. so big difference. You can make the term whatever you like within reason and the shorter the term the more your monthly payments will be. You will be looking at around 350 per month for 50k on a 25year mortgage.

Barros

I'm even considering just renting for another 6 years or so and saving, and buying a property cash outright - the cash that I'll pay in rent is much less than any mortgage interest I'd pay.

adwat

Good plan Barros, carry on renting & saving and buy outright. House prices are only heading south for the next ten years at least and we're no-where near the bottom of the market right now. Why buy an asset that's depreciating? In the meantime enjoy the flexibility that renting affords. Good luck with your saving.

Sepa74

If you can seriously rent for less than the interest on your mortgage repayments then I would probably consider doing so. Anglo-Saxons (ie UK, US, Australia, NZ etc) tend to be obsessed about buying property, but there is no reason not to rent if it benefits you in the long run.

You're lucky to be in that situation! There is no way I could rent where I live now for less than the interest I pay. I would be lucky to get a single room in a sharehouse for the interest I pay, so I'm very glad I bought because it's increased my quality of life immensely.

dimbo61

Renting has advantages and disadvantages and the same can be said for buying a property but if you can save £1000 a month then a £100K property should be affordable once you have saved a 25% deposit

Barros

dimbo61 wrote: »

Renting has advantages and disadvantages and the same can be said for buying a property but if you can save £1000 a month then a £100K property should be affordable once you have saved a 25% deposit

Yeah i think im very lucky tbh!

have just under £25K now so in another year - nearly £35K hopefully. I think its just discipline, and although im not having many nights out etc just now - to know how much im saving and offsetting that against low/no mortgage is the light at the end of the tunnel :money:

dimbo61

the trick is when to jump from renting to buying your first place!
We dont know where you live and the cost of housing for what you need but if you have a look on a couple of mortgage lenders websites you will get an idea of how much you can borrow and how much that size of mortgage will cost each month.
Then have a look on rightmove to see whats available in your area
Draw up a short list and give a few estate agents a call and go look at empty properties!