FTB Mortgage Advice

NathanHale

I've read loads of threads on here over the past few weeks, so hopefully my question won't be too basic!

I'm currently attempting to buy a house with my other half. Between us we earn £41k p/a, no bonuses. She has a student loan left to pay, which is about £7k I think, but due to her salary she has paid very little of it off.

We have a deposit of £60k and plan to get a mortage of no more than £100k, thus the houses we are looking to buy are all in the £160k region (n.b. we have circa £10k earmarked for moving costs & decorating).

My concern is what we do regarding the mortgage. In the current climate of rising rates and slowing house prices I think a fixed rate deal would probably be our best bet. The problem I face is that I'm really not 100% sure what I should be looking for, and what is and isn't a good deal. Ideally I'd like to be able to 'overpay' on the mortgage if possible, and I'm not too keen on the idea of having to pay out a large chunk of cash if we decided to move again. So I guess I need something that is best for us over the next 3-5 years.

I'm not asking for people to say you need 'X' mortgage, but if anyone has an opinion on what they'd do in a similar situation then I would be very grateful.

Cheers :cool:

pollyanna24

I personally would only go for a fixed rate mortgage as at least you know what your payments are going to be. I only fixed mine for 2 years and am kicking myself now as my mortgage is going to be a lot higher come next April.

I have a mortgage with Nationwide who seem quite generous on what they will offer (not that that should swing it for you, and only borrow what you feel comfortable with).

They have an option to overpay by up to £500 a month which is easy to do if you have Internet banking (well I think it is easy, but I have my current account with them as well). This doesn't drop the amount you pay each month, but I'm not sure if something happens once the fixed rate is up I'll let you know next April!

FTB83

In all honesty, I'll probably seek the advice of an independent mortgage advisor. We were in your position this time last year and found a really good guy who could do whole of market comparison which meant we could find the best deal out there for us. He also explained the differences between types of mortagage etc. And it cost us nothing, he got commission from the mortgage provider (incidentally, ours was also Nationwide).

Hope all goes well.

FTB83

Lipstick_2

Hello. I also think that you should consult a whole of market mortgage broker as it appears to me that a more flexible capped rate might be more appropriate.

Capping the rate means that your payments will not go up if interest rates go up but you could also benefit if interest rates go down.

This of course is based just on the information that you have given but a good mortgage broker would take this further during the initial discussion and hone things to suit your circumstances for both now and in the future.

Luv

Lipstick

MortgageMamma

A tracker capped could be a good option or even a fixed rate which does not tie you in with early repayment charges. You are right rates have risen but do not let that panic you, they csan just as easily come down again.

MortgageMamma