Advice re: mortgage

wr2004

Hello

New to these forums so I hope this is okay to post, but if not then let me know.

I just wondered if I could get some advice about what my best next steps are.

I am the owner of a flat with approx. £15k equity, and I have £15k in savings. My wife, who moved into my flat after I'd bought it, has approx. £5k in savings. So we will have £35k for a deposit, possibly more although a lot of money we save in the next few months will go on fees when we move!

We're going to begin looking for a house soon. We won't look any higher than £250k because of the stamp duty threshold.

The best deals I can find on the Internet seem to be a mortgage for about £1,100 per month and a set up fee of up to £1k.

This feels like quite a lot, but that might be because I am paying an interest only mortgage at the moment (£581 per month on a £155k mortgage).

Just wondered if you think that's about right, if I've missed anything, or if you have any advice?

Thanks!

Warren

kingstreet

wr2004 wrote: »

Just wondered if you think that's about right, if I've missed anything, or if you have any advice?

As the cost of a mortgage is a function of the amount, the term and the rate and you've only given us information on the amount you intend to borrow, we're struggling a bit here...

wr2004

Okay sorry, but in terms of the rate, wouldn't it be the lender that would set this? So I don't really have any say?

And in terms of the term - isn't that a fairly standard 25 years?

Sorry, not the most knowledgeable on this!

kingstreet

You've posted a figure of £1,100 per month, and told us you intend to borrow somewhere in the region of £215,000.

We need to know what rate you've used, or found as a possibility for your new mortgage, and what term you used to carry out the calculations.

It's an 86% loan to value mortgage, so you'll be looking at 90% offers. You can pick any reasonable term you like, but the longer the term the more interest you'll pay.

Asking if £1,100 is a high mortgage payment without giving us a base to work from is making the job a little difficult.

To make things easy, why don't we just say;-

The monthly cost of a £215k mortgage on a rate of 5%pa over 25 years is £1,256.87 and move on from there.