Mortgage Maths!

lagentium

I am looking at purchasing a new build and for the part exchange offer, the developer is offering a cash incentive to meet the shortfall between their part exchange price and what we would likely obtain if selling our house normally. I'm factoring in the convenience, lack of estate agent fees etc but unsuccessfully trying to understand the impact over the life of the mortgage.

So if I accept the part exchange offer I initially need £20k extra on my mortgage but would then get £20k back as a cash incentive. If I banked this and then used to pay off mortgage at first available opportunity (thinking after 2 year fixed when no fees) then do I just need to consider the impact this £20k has had over the 2 years rather than the entire 25 years?

Just trying to understand how much the incentive is worth as originally thought it was like for like but having to take out the larger mortgage obviously has an impact!!

Thrugelmir

Sounds as if the developer is attempting to maintain an inflated selling price for the new property. Any incentive needs to be advised to your lender. This may well impact your mortgage offer. There's no such thing as a free lunch.

KnowledgeIsLife

As per above I know that some lenders do not accept cash incentives which could throw a spanner in the works with most mortgages you get an allowance of 10% which you can use to make overpayments why fixed so if you get a mortgage for 200k+ you could pay the 20k straight away and the interest should be adjusted from that point.