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Cash or Mortgage?

edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
2 replies 509 views
MoneySaverLogMoneySaverLog Forumite
3.2K Posts
edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
So options are...

Save for 10 years, buy a house outright for cash somewhere in region of £130,000.

Buy in 2 year time, but with a 75% mortgage

Which is the better option?

Wait the 10 years - House prices could go up in this time and what I can buy today, or in the next 2 years, for £130,000 may not be available in 10 years times. (They could of cause continue to go down in value too, in which case this would be a good option)

Taking the mortgage - Get house early before hopefully prices go up but end up paying the bank interest over the time on the mortgage so paying it back over a longer period of time.

Replies

  • museumworkermuseumworker Forumite
    2.2K Posts
    Part of the Furniture Combo Breaker
    ✭✭✭✭
    I considered this scenario before buying this place - I was in a cheap housing association flat. However I worked out that even with cheap rent, I wouldn't be able to afford to buy outright if saved the difference between the mortgage and the rent.

    You don't say if you are paying rent, but I imagine you have some costs involved with where you are living now.

    I decided to buy, and am glad I did as even with a relatively flat market (in the last 3 1/2 years) our house has gone up in value by about £40K (without including the extra value we have added through works to it).

    Personally, if you can afford to buy now and can get a mortgage, I would buy now. You can always OP to shorten the length of the mortgage and the amount you pay in interest. Plus you get to enjoy your own home, rather than spend 10 years living somewhere else.
    Mortgage [STRIKE]16/03/2011: £190K 01/01/2017: £107,729.65 [/STRIKE] 01/07/2017: £95,979.89
    OPs 2011-2016 = £45K 2017 OPs = £9250.20
  • beachiebeachie Forumite
    463 Posts
    Guess it depends where you are going to live over those 10 years. If you are renting then you may as well get a mortgage and then pay the interest if it is the same of less than rent would be.

    Also I love having my own place. I can decorate it how I want, I can change what I want so you might feel better if you buy somewhere with a mortgage.
    Mortgage: [STRIKE]Jan 11 - £91830 [/STRIKE][STRIKE] Jan 12 - £89'199[/STRIKE] May 14 - £69'999 Car Loan: [STRIKE]Jan 11 - £3658 [/STRIKE] July 12 - £0! Credit Card: [STRIKE] Jan 11 - £3300 Jan 12 - £2250 [/STRIKE] Oct 13 - £0

    MFiT-T3:#43 (Half Mortgage) April 13 - £10719/£42875 (25.00%)
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