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Will the inflation of property exceed the interest payments on a mortgage?
jules321_2
Posts: 2 Newbie
I can't work out what is the best long term.
Is it better to take out a larger mortgage for a bigger house as this would be worth far more in future or would it be best to have a much lower mortgage to save on interest payments?
Is it better to take out a larger mortgage for a bigger house as this would be worth far more in future or would it be best to have a much lower mortgage to save on interest payments?
Should we take near the maximum allowed on a mortgage? 6 votes
Yes
16%
1 vote
No
66%
4 votes
Don't know
16%
1 vote
0
Comments
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Property prices do not always increase."You were only supposed to blow the bl**dy doors off!!"0
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Buy what you need/can comfortably afford. Property (including the very illiquid asset that is your house) is only one part of a diversified portfolio.
A more expensive house is likely to lose more money than a cheaper house too.
I seem to recall in a rapidly falling market a) people would wait longer for the price to drop, b) put in a much lower offer & c) as buying takes so long they threaten to pull out before exchange unless the price is lowered further. Making the house even more illiquid at that time.0 -
Are you buying as an investment or as a home?I am a mortgage adviser.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.0
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House prices are impacted by a variety of factors. Increase in value or "inflation" as you put it depends on whether these factors are positive (or even negative) over any given time frame.
With a smaller mortgage the interest to service the debt is lower. This would enable you to repay the debt even quicker. Leveraging up against a back drop of higher interest rates in the future is something to consider.0
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