What type of Mortgage would YOU recommend? As a first time buyer

EmmasWorld

Hey guys,

Will be looking to purchase my first house in the next couple of years, hoping to get a deposit of £40,000 - more if I can save it! Will be looking to purchase one as cheap as possible but in a fairly nice neighbourhood. Maybe for around £110-130k if I'm lucky.

What type of mortgage would you recommend as a first time buyer? Honestly?

I like the idea of being able to repay early whenever I can! But really don't want to get lumbered with some giant mortgage I'll be paying off forever.

My other debate was whether I should use a smaller deposit of say 20k and leave 20k in stocks! But I doubt that works out for the best.

Thanks!
Emma

dano17439

Tracker for me, still some cracking deals out there with a healthy LTV such as yours

Thrugelmir

Repayment over a 25 year term that's affordable.

PalmerUK

I like the idea of tracker too!

EmmasWorld

I'm right in thinking that all are pretty much repayments if you want to own the house at the end?

Does the tracker just stay the same as market rates in terms of interest?

I quite like the concept of the payments going down over time, though probably isn't the best option financially?

Thanks!

JennGa

It depends entirely on you.
We have gone for a 5 year fixed with manageable monthly payments, we like to know exactly what we are going to be paying for the next few years.

kingstreet

EmmasWorld wrote: »

I quite like the concept of the payments going down over time, though probably isn't the best option financially?

There is no product which features that.

Payments are based on the interest and the need to repay the capital by the end of the term. Assuming rates are at their lowest ever levels, the payments will always be at the current level, or higher.

EmmasWorld

That's strange I'm sure a couple of people I've talked to has come down over time Maybe I'm getting confused!

kingstreet

Their payments may have fallen as interest rates fell, or their product ended returning them to a lower "follow-on" rate, but there's nothing deigned to reduce as time goes by.

AndyT678

EmmasWorld wrote: »

Does the tracker just stay the same as market rates in terms of interest?

The interest rate that you are charged will change whenever the Bank of England base rate changes if you have a tracker.

EmmasWorld wrote: »

I quite like the concept of the payments going down over time

As Kingstreet said the payments will stay the same but their actual value will be eroded over time. £100 today and £100 in 20 years will be very different.

Whatever you choose, make sure that you can afford your borrowing if interest rates go up and think twice before plunging all of your money into the deposit. You would be wise to retain some "cash" savings that you can access in an emergency. Also long term investment is a viable alternative to overpaying on a mortgage.

EmmasWorld

Thanks! That's some really helpfully advice. I am quite tempted to just stay with the stocks I'm doing if things keep going well!