Want to be MF but need a bigger house!

brassmonkey001

I've been in my house for just over 4 years now and have switched deals a couple of times and now my current deal ends this Saturday. I have been accruing some savings as the interest rate on the savings was better than the interest paid out on the mortgage but that is no longer the case. I am still putting a total of £450 a month away into a couple of 12 month regular savers giving 5% at the end of the year so I'll leave them as is for now.
I have £36K left to pay on my mortgage and £20K in my Santander account so I'm thinking my best move would be to chuck that £20K into the mortgage leaving only £16K left to pay which if I stayed put I reckon I could pay off in full in only 3 years!
However, I'm not staying put, I'm planning to buy a bigger house with my girlfriend. My house should fetch £160K so that should leave me with a deposit of £144K but she has a much bigger mortgage than me and estimates that selling her house would give her a deposit of £30K to add to the pot. So if we buy somewhere for £175K we could be mortgage free in our new house! But £175K doesn't get you much around here so I'm thinking £225K is our upper limit, thus a mortgage of £50K is needed.
Sorry if I'm rambling a bit, I've kind of lost my thread trying to get it all down!
My fixed term mortgage interest rate of 1.44% ends Saturday and switches to the SVR of 3.99%
I have £20K in Santander giving an interest rate of 1.5%
I could search for a new mortgage deal to secure another low interest rate but my thought is that I might as well stay with my current provider and take the hit of the SVR for a couple of months until we buy another house when we will take out a new mortgage.
So my plan for now is pay £20K off the current mortgage and perhaps start overpaying monthly as well (I hadn't been able to before now due to penalties for overpaying).
How does my plan look? Any suggestions to improve it? Have I got it all wrong? Over to you lot. TIA :beer:

brassmonkey001

Ah well, no replies. Never mind. I've done it now. £20K knocked off my mortgage. I hope I've done the right thing.
The mortgage calculator shows that I should save £10K and reduce my term by 10 years, but it still feels weird.

kazwookie

Do you NEED a bigger house?

I would stay put where you are.

brassmonkey001

kazwookie wrote: »

Do you NEED a bigger house?

I would stay put where you are.

We definitely need a bigger house!

phillw

brassmonkey001 wrote: »

How does my plan look? Any suggestions to improve it? Have I got it all wrong? Over to you lot. TIA :beer:

Personally I would get the largest mortgage you can and buy the best house you can afford and not worry about how much you owe. You'll be glad you did in the long run.

Unless you are worried that you might not be together for the long haul, then I wouldn't consider buying a house together at all.

That SVR is going to hurt though, so make sure if you're taking the hit that you are going to buy somewhere soon.

brassmonkey001

phillw wrote: »

Personally I would get the largest mortgage you can and buy the best house you can afford and not worry about how much you owe. You'll be glad you did in the long run.

Unless you are worried that you might not be together for the long haul, then I wouldn't consider buying a house together at all.

That SVR is going to hurt though, so make sure if you're taking the hit that you are going to buy somewhere soon.

If I was younger then that would have been a good plan. However, I'm of an age now where I'm thinking ahead to my retirement so I want to be mortgage free asap so that when the time comes I can ditch the 9-5 and enjoy myself.

I'm not worried about us splitting up otherwise I wouldn't be planning a life together!

SVR won't be too big a hit, it's only £50 a month more and TBH I was thinking of overpaying more than that anyway.

When I spoke to the bank on the phone, they said I could re-calculate either my monthly payments or the length of my term with regards to my overpayment lump sum. I declined both. I'm not sure whether recalculating would have meant being locked again into another 12 month contract, or have an effect on my credit rating, bearing in mind that I will be seeking another mortgage in the near future?

edinburgher

brassmonkey001 wrote: »

We definitely need a bigger house!

Are congratulations in order?

brassmonkey001

edinburgher wrote: »

Are congratulations in order?

Ha! No! Not at our age, thank goodness!