Buy now on 95% LTV or wait until 2nd stage of HTB comes in?

lawlie

Hi,

I was hoping to get some views on what might be the more "sensible" thing to do.

Having eyed the London market for a while now, we could go ahead with the Clydesdale 95% LTV mortgage (we both have good credit ratings and income so hopefully shouldn't be a problem), or wait until January when the HTB scheme part II comes in and get a better rate then?

In comparison with the current NewBuy rates (using it as a benchmark for what may be offered when the new scheme comes in), it's about 1% difference (Clydesdale is 5.49% I think), which would equal to about £200 a month different in mortgage repayments.

However, I'm also concerned that house prices will rise sharply once the scheme comes in.

The other, less important factor, is that I am really eager to just get a toehold in the market!

Any advice appreciated.

CKhalvashi

I'd personally do it now, as there's not as much demand in the market as when HTB will be back.

It's mainly down to personal choice.

CK

brit1234

I would save a bigger deposit. 5% deposit would leave you in negative equity when London prices finally fall. It happened in 2008 and it is going to happen again when mortgage rates rise.

lawlie

The problem is by the time I save a bigger deposit, the prices will have gone up again. I would rather get a toehold in now.

I'm viewing it as a long term investment (so if we move on somewhere else after, would keep it as a rental property) so any downward movements in price in the next few years are less of a concern.

amnblog

Or you could speak to a broker about accessing an exclusive at 95% priced at 4.59%

lawlie

Hi amnblog, is that the Leeds BS one? Is that available to all brokers?

lawlie

I think that's limited to 300k if 95 LTV