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Buy now with 5% deposit or wait?
Comments
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Found the figures on Nationwide, the 4.2% and 4.6% are the overall cost for comparison rates rather than the initial fixed term rate.
Here are the figures with the actual rates.
£156,750 on a property value of £165,000
3 years
5.49%
£961.64
fees
£499
£148,500 on a property value of £165,000
2 years
4.24%
£803.64
Fees
£4990 -
Yes, £20,000 is the amount we originally wanted to save.
I have to admit not being very au fait with mortgage jargon, what does SMR mean?
Looking at the Nationwide mortgage calculator it gives an initial rate of 5.49% on the lower deposit, followed by the SMR at 3.99
We both have good credit scores recently checked on experian.0 -
Standard mortgage rate, which may or may not be the same when your fixed deal ends. The rates are low at the moment due to the BOE interest rate being historically low and also the banks have been able to loan money cheaply.0
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Have you found the house you want yet?
This may take you months to find the perfect one, so more money being saved while you are looking.0 -
Ok, so if you buy a property for £165k with a 5% deposit (£8250), you would need a £156750 mortgage. The rate would be about 5% with a 5% deposit, so you'd pay £927 a month.
£653 of this would be MORTGAGE INTEREST, which is no different to paying rent, so almost the same as you are paying now!!
If you save 10% deposit (so £16.5k), then you'd need a £148500 mortgage. Interest rates with a 10% deposit are MUCH better, so 4.5%.
You'd then be paying £834 a month, with £556 interest.
The figures make it quite clear that you should save a 10% deposit, as with a 5% deposit, you are financially worse off, given you have to pay your own house maintenance!!Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0 -
Thank you for doing those calculations for me PinkShoes. Makes interesting reading!0
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Out of interest, how do you work out your calculations?Ok, so if you buy a property for £165k with a 5% deposit (£8250), you would need a £156750 mortgage. The rate would be about 5% with a 5% deposit, so you'd pay £927 a month.
£653 of this would be MORTGAGE INTEREST, which is no different to paying rent, so almost the same as you are paying now!!
If you save 10% deposit (so £16.5k), then you'd need a £148500 mortgage. Interest rates with a 10% deposit are MUCH better, so 4.5%.
You'd then be paying £834 a month, with £556 interest.
The figures make it quite clear that you should save a 10% deposit, as with a 5% deposit, you are financially worse off, given you have to pay your own house maintenance!!0 -
Out of interest, how do you work out your calculations?
I used the interest rates offered by Halifax for a 5% or 10% deposit, then if you google "mortgage calculator" you'll find lots of them that work the costs out for you.
Interest on a mortgage is just the same as rent, but your Landlord is the bank.Should've = Should HAVE (not 'of')
Would've = Would HAVE (not 'of')
No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)0
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