Overpay or save deposit?

coco2972

Hi, I am new to the site and hoping someone can help with a question.

1 year ago we bought a New build house. It cost £202,000 but the developer had a first time buyer offer where we paid no deposit but they own 25% of the house. We have a mortgage for 151,000 over a 40 year term (we are 24).

We will want to move at some point in the next 5 years as this house won't be big enough when we start a family. We have come up with a budget that lets us save £250 per month. Should we pay this off the mortgage or save it so we have a cash deposit on a new house. I am afraid that the house will lose value if the market crashes (it may have been overpriced when we bought it). Can someone talk me through the logic of the best way forward?

shellnapier

just found this OLD thread- wonder if you purchased? and if are now in neg equity?

Adebisi

lucky for them you can still have babies well into your 50's now.

Lynn11

If you recently bought a new built last year then there is a high chance that you paid a high price for it compared to the house price this year, therefore I believe that you should overpay your mortgage if you are able without ERC charges for 1-2yrs and then you can consider putting the money into a savings account to save up money for the house move you intend to do. We are currently putting money into our savings and overpaying to our mortgage each month, as we hope to move house in 2yrs time but we need to see if the sums add up at the time.