5 year plan.

AdamMc90

Hello everyone - firstly I didn't know whether this was the appropriate section for this thread or not, was a toss up between here and budgeting and bank accounts but if I got it wrong feel free to snort in derision and move me along.

Basically, I'm just turned 24 and have (almost) bought a house with my girlfriend, we've entered into a 5 year fixed at 3.6% with monthly repayments of just under £558. I tell you this because I've been thinking what position I would like to be in, in 5 years time when the fixed term is up and starting to get organised for it.

Firstly I would like to get the mortgage under 100k within the 5 years, so starting at £122,750 would mean overpaying £160 a month for the full 5 years to get it to £99,759. We've bought the house at £163k and it needs a fair bit of work but judging by the area and likely increases in prices I've put a price on it at 180k in 5 years time (just a guess more than anything but helps my calculations). So hopefully 80k equity in 5 years.

Also I have sharesave schemes totalling £25k over the next 5 years (one every year but not equal amounts) so I am looking at saving all of this, as well as saving an additional £5k. Giving us a total deposit of £110k (80k equity, 25k sharesaves, 5k savings) to purchase our "forever home" whilst remortgaging current house on an interest only BTL at 100k.

I understand the sharesaves will be a bit different and actual house price may vary but do you think my numbers add up? Is it possible? Would you do anything different or recommend tweeking the plan at all?

Also once the house purchase (finally) goes through I will keep this thread updated with our progress, should we decide to go ahead with this plan .... and feel free to add your own 5 year plans as well if you wish (I'm nosy)

Adam
(apologies for the long post)

AMG2B

Sounds good to me. To be honest, if you wanted to be super cautious I think I wouldn't bank on any increase in the value of your property. It may be that your improvements will bring it up to this, but we don't yet know what the impact of any interest rate rises will be on the property market, and what state the economy will be in then. For example if the EU referendum goes ahead in 2017 that will have quite a lot of effects on the economy however it goes etc.

AdamMc90

Thanks for the reply. Take on board what you say and do factor it in, if our improvements don't increase the value and the market increases don't happen for whatever reason then I think I'd like to stick to the same plan (£160p/m OP) and just have a slightly revised figure at the end of the 5 years for deposit for next home. Which hopefully would mean the next home would be the same either way but just at a lower market price!... if that makes sense!

I think its hard to predict the markets in 5 months nevermind 5 years but as long as my math is there or thereabouts and I've got a clear obtainable goal I think I will stick with this one.