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How do I buy my next property?
chelseablue
Posts: 3,303 Forumite
I currently own a 2 bed flat, with a mortgage
I have now started saving up to purchase a house in about 3-4 years time
My question is about the money Im saving up every month:
Do I use it to overpay my current mortgage and then when I sell use the equity towards my next property?
Or just save it up in the bank?
I have now started saving up to purchase a house in about 3-4 years time
My question is about the money Im saving up every month:
Do I use it to overpay my current mortgage and then when I sell use the equity towards my next property?
Or just save it up in the bank?
0
Comments
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Depends on your current mortgage interest rate? Is it higher than the interest you would expect to earn on your savings? If so, bit of a no brainer.0
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Let_Us_See wrote: »Depends on your current mortgage interest rate? Is it higher than the interest you would expect to earn on your savings? If so, bit of a no brainer.
If I get accepted by Norwich & Peterborough my new mortgage rate will be 2.29% :T
Ive got a savings account thats paying 2.5% (taxable) so I guess its better to save the money in the bank0 -
It makes more sense to overpay as then your interest will decrease faster so you can gain more equity. Check your mortgage terms first as some banks charge if you overpay by too much.
Don't forget you'll need some cash for costs - estate agent fees, solicitor, moving van etc.0 -
After tax your interest will be 2% (I think? Can anyone confirm?) so better to overpay.chelseablue wrote: »If I get accepted by Norwich & Peterborough my new mortgage rate will be 2.29% :T
Ive got a savings account thats paying 2.5% (taxable) so I guess its better to save the money in the bank
Edit: Unless you can find a savings account that pays 2.3% after tax, then it would be better to switch to that account and save.0 -
Depends on income/marginal income tax rate.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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You are thinking of moving in three to four years, but are applying for a five year fixed rate?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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kingstreet wrote: »You are thinking of moving in three to four years, but are applying for a five year fixed rate?
No its 3 years fixed rate:
http://www.nandp.co.uk/mortgages/types-of-mortgage/fixed-mortgage/3-year-fixed-rate-mortgage-65-26613/0 -
kingstreet wrote: »Depends on income/marginal income tax rate.
My income is £28,986 from my main job and £5,900 from my 2nd job0 -
So, you need to deduct 20% from the savings rate you mentioned. 2.5% x 20% = 2.0% net as mentioned previously.chelseablue wrote: »My income is £28,986 from my main job and £5,900 from my 2nd jobI am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
chelseablue wrote: »If I get accepted by Norwich & Peterborough my new mortgage rate will be 2.29% :T
Ive got a savings account thats paying 2.5% (taxable) so I guess its better to save the money in the bank
What interest rate are you currently paying?0
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