1 Year Mortgage?

paully

Hi All

We are buying a house for £470,000 and the buyer has forced our hand (yes, we love the new house that much) to exchange before we have sold our current property at £400,000.

We have savings amounting to £400,000 which we could dip into.

We would like a mortgage for X amount to enable us to buy the new house, and as soon we sell our current house, pay off and close the mortgage.

We estimate only having this for 1 year.

What is our best option? Mortage for all of it, or dip into our savings (which currently get us about £1,000 a month interest)?

Thanks in advance.

Paul

Rafter

Paul,

Presumably you are taxed on a lot of your savings?

If there are no exit penalties on your savings I would suggest using these.

If you do decide to mortgage go for something without early redemption changes and without a high up front fee. The rate will be higher but it will cost you a lot less than the fees and exit penalty if you do repay after one year.

If you need the investment income to live on then you may well have to mortgage, as long as you have enough income to support it. In any case the best value mortgages will probably be restricted if you cannot provide 25% deposit.

Good luck

R.