Mortgage Vs saving total house price?

topcat007

Hello all,

I am wondering as i am currently saving 80% of my yearly wage and have been doing for a few years now.

I currently have the 'dilemma ' continue saving for another 8 years and buy a house in my budget out right with no mortgage . Or get a mortgage now on a 60% LTV.

What i am trying to work out with great difficulty is will i ever catch the gap by saving of how much property value keep going up?

Hope this is not to much of a daft question been a long day!

nubbins

Hi,

There are too many variables, area you live, rent you are paying, market in 8 years time etc etc.

If I was you I would be looking at what house prices were doing 8 years ago in your area and comparing them to what they are now. In my area a house that sold in late 2006 for 385k sold Nov 14 for 625k another one 290k in 2007 versus 435k in Jan 15. Obviously in other areas the price rise might not have been so dramatic but you could also argue that we had the worst recession in decades inbetween. The market could go in reverse but for me if I was in your position with a mortgage of 60% LTV I would be getting on now and not waiting 8 years. On the other hand if your rent is next to nothing and you are happy where you are and you think you can keep up with any house price rises over the next 8 years then obviously it needs careful consideration.

kinger101

Buy the house NOW. With 60% LTV, you'll get a very low rate. In 8 years, the house you want to buy might be another 50% more. So then it will be another four years.....by which time, you've got tired of being a puppy chasing you own tail.

Are you renting now? Please don't tell me you've be paying off someone else's mortgage when you could have been paying off your own.

michelle2008

Eight years is a long time. I really enjoy owning my own home - and hated renting so I might be biased - but if I were you I would buy now and enjoy your home. You have built up an excellent deposit - well done.

pdhroche

I was in the same predicament, within 5 years I could have bought a house outright. I, however have decided to take the leap and apply for a mortgage of 50% LTV and I am glad I made that decision.

I would like to know, do you rent or live with parents? Do you pay any keep if you are with parents?

Everyone is different but I have always been bought up with the knowledge is that renting is dead money and you are always better investing in property. Yes the money in the bank does look good however buying a property and doing what you want to it by improving could increase the value of the property significantly and you could be better off financially that if you had put it in a 'high' interest rate savings account.

If you do go for the mortgage option, Choose a mortgage that allows overpayments!!

Pixie5740

You have to live somewhere so you're either renting somewhere or still living at home. If you're renting how does the rent compare with mortgage repayments on a 60% LTV mortgage. If you're still living at home do you still want to live at home for another 8 years, do your parents want you living at home for another 8 years?

gazter

John Lennon once said "life is what happens when you are busy making other plans".

Get the house now....

topcat007

Thanks for everyones replies!

I am currently living with parents

michelle2008

Buy:-). The freedom of your own place will be amazing! You will love it

Herbalus

Make sure you get a mortgage that allows overpayments.

firebird082

I can't imagine why you are even considering living with your parents for another 8 years! No question, buy not. 60% LTV is much, much better than 99% of FTBs can offer.