First time buyer - remortgage question

Blimsters

Hi

I've just started saving from scratch to buy my first home, and I am aiming to save a 10% deposit. My preference though would be to be able to buy a house as soon as possible, as I am currently indefinitely lodging with a friend and it's not an ideal medium-term solution. I understand that a 5% deposit would leave me with a significantly lower rate than a 10% deposit, but another option I am considering is to take out a 95% mortgage on say a 2 year fixed rate, and then during those two years save the additional 5% and remortgage on what would effectively be a 10% deposit.

I realise that I would be paying more during the first two years than I would be if I had then 10%, but my questions are:

(a) Does this make sense/is it actually possible?
(b) Are there any other significant financial disadvantages, other than paying a bit of a higher rate?

The other factor in my consideration is the potential increase in house prices while I continue to save the additional 5%, and that this could effectively cancel out the higher payments I'd be making if I bought earlier.

I'm very new to this, so any thoughts or advice would be appreciated.

Thanks

getmore4less

Check the rates of 95% and 90% mortgages and how much extra it will cost. Full rate on 5% + the difference on 90%

then think about how much prices could go up or down in the time it takes to save another 5%

on £100k over a year with say 4% and 3.5% the extra is £200+£450 a year or a 0.65% price rise.

Lolly88

I guess the main disadvantage would be that if prices did fall in that 2 year period you could be at greater risk of being in negative equity. Coupled with a rise in interest rates - this could leave you in vulnerable position financially.