Buy in 2 years, or pay off mortgage & buy in 5ish?

Discogod

Would appreciate anybody who can help me rationalise this idea.

I've got a £45k mortgage on my first house we bought 2 & half years ago at £74k. There is now currently approx £37500 left to pay on the mortgage with exactly 18 years left (as of last month), we currently pay £273 per month. This is at a fixed rate of 5.15% until 01/09/2009.

Since we moved in we've put in double glazing, central heating and done some tiling in the bathroom. Before we sell i'll be putting a new lawn in, replacing the fence, new/replacement kitchen & touching up paint/wallpaper in places that need it. I approximate we'll sell at around £90k, but that's neither here nor there.

I want to move house, i want bigger rooms with a better quality build, a move up the ladder. I currently live walking distance from work, but they are moving to the city centre by 2009. So i figured then would be a good time to move house. (also end of my fix rate mortgage in August of that year)

We've decided to pay off as much capital as reasonable, our mortgage allows 10% without any penalty. I've already paid off £4.5k this year & plan to do the same for the next two until the end of the 5 year fix term, then move house. This should mean that in Sept 2009, i should have about £21k left to pay off. If i move house at this time, i should have £69k to pretty much put towards the new house/mortgage (not including savings).

Either the above scenario or we follow the above but instead of selling, we double our capital repayments up to £9k per year (which we believe we can afford, depending on outside circumstances & the interest rate). Then once paid off, we then use the whole of the house as deposit for a new mortgage.

Can anybody help me work out a) how long approx it would take to pay off the mortgage in full by following the 2nd example? b) is doing it one way better than doing it the other?, do we save more money, get better house etc etc? My head is kinda lost in the whole mumbo jumbo right now & I can't work out which would be best, perhaps a compromise is needed.

So i want to open this thread to your thoughts, anybody who has taken the time to read this, THANK YOU, those who kindly offer advice, well, double that THANK YOU:beer:

Discogod

a colleague of mine today suggested to me to keep the house i'm in now, but rent it out & buy a new one, using the first house as security.

Seems a good idea on the face of it, i feel i'll be best talking to the building society about my options.

do_it_today!

hi :hello:
ask on some property forums like https://www.singingpig.co.uk and google for others - also talk to mortgage advisors too.... I think the renting house idea is a good one and will mean you wont have a chain when you are ready to sell. best thing is to do a bit of research on being a landlord as well so you can prepare abit if you do want to go down this route or you may find that you arent interested at all and just want a straight sale

irnbru_2

According to this

Discogod wrote:

I've got a £45k mortgage

Discogod wrote:

We've decided to pay off as much capital as reasonable, our mortgage allows 10% without any penalty.

this

Discogod wrote:

we double our capital repayments up to £9k per year

will incur a penalty.

You need to know the penalty.

I couldn't get my figures to align with the information you gave.

However, I estimated completion on 09/2013 with £4500 repayment.
I estimated 09/2011 completion with £9000 repayment excluding any penalty.

Discogod

do it today! I will go ask on a property forum, thanks for the suggestion

irnbru Thanks for your post. I failed to mention that i believe there is no cap on our capital repayments outside of our 5 year 'contract' with them. I will go & double check this though, i may well be wrong!

I've also created a very useful excel mortgage calculation tool using advice from a weblink somewhere (lost it now!). This proves your calculations are correct. (the figures i did earlier were done approximately & in my head)

I'm going off now to hunt for landlord information to see if letting the property is something i think i wouldn't mind doing.

Letting it out certainly seems a very good option...