Buying vs. renting costs

dod929

Hi, am hoping to pick some brains of anyone knowing the ins and outs of the costs of buying/selling a house!

We are currently renting at the moment, both work mediocre jobs earning total after tax of around £30,000 PA, I am also a full time student finishing Sept '17. We are looking to immigrate in around 2.5 years but looking at ways to save money until we go.

We have a £25,000 deposit and a friend has just bought a 270,000 2 bed flat with a smaller deposit and a monthly payment of £450. We are renting a tiny 1 bed flat for £625 PCM but all I can find online is costs depend on the area/house/price.

Has anyone tallied up their costs of firstly buying and then selling in South Central area? Is it worth stumping up the costs to buy and then sell in 2 years time?
the monthly saving of just over £4000 if it is just compared mortgage to rent ratio without taking in extra costs.
Am I being too tight and in your experiences is it worth the stress? TIA!

FBaby

Are you sure theirs is not interest only? Didn't think these were much available for residential mortgages any longer though. Getting a mortgage over £200k on your current income even with a 10% deposit is not going to be easy let alone getting an interest only one.

spadoosh

Buying and selling normally takes minimum of 6 weeks, averages are 6 - 10. If you wish to move abroad in around 30 months, you will be looking at 4 months of that being the buying/selling process in which you will be paying rent and buying selling costs. Selling costs can easily reach £2000 depending which routes you take. Buying costs can be £1000+. Then you will need buildings insurance normally stipulated by the lender (average £230 per year).

You will not save enough money to offset the expense. You will have the hassle of trying to buy and sell a house quickly.

Up to you to decide if its worth it. Personally i would say definately not making any money and probably not saving that much money and the hassle of turning a house around in 2.5 years wouldnt be worth the stress.

I dont think your friend is being truthful with their property. A mortgage for 245000 even over 40 years at 1% (extremely generous if they have a less than 10% deposit) will cost you £619 a month.

fairy_lights

dod929 wrote: »

We have a £25,000 deposit and a friend has just bought a 270,000 2 bed flat with a smaller deposit and a monthly payment of £450.

That doesn't quite add up, unless they've got an extraordinarily long mortgage term. Are you sure those are the correct figures?

Pixie5740

I was going to say that your friends figures don't stack up unless it's a shared ownership property or something and they've bought.

I agree with spadoosh, by the time you've factored in the costs of buying and selling it's really not worth it for 2.5 years. There's more to it than just rent versus mortgage repayments.

dod929

Sorry rather expensive typo; £170,000 !!!

Thats what I was thinking, not worth the hassle if not going to be saving £1000+. Never know could have found somehow to do with buying/selling process on a shoestring. Thanks.

System

the friend has done incredibly well there then! my mortgage for more than 100k less and with a much bigger deposit is more than that per month...
Go to a mortgage advisor and see what you could borrow and what the payments would be, for a short term like 2.5 years you would probably spend more on solicitors, estate agents and mortgage exit fees to make it worthwhile, but you could wait a bit longer and change it to a buy to let and have it as a small income and only sell it when you need a big bit of the money overseas

prosaver

you could buy a small flat and then rent it out, furnished when you leave