House buying worries

sal_III

then the help to buy repayments on top which are currently £175 a month but if the house is valued higher, will be more than that.

Not quite, the interests are only based off the initial amount borrowed. Only the repayment is based on sale price / RICS valuation.

The chances of interests rates being much as high as 4.7% in 5 years are very slim. Even then you should be able to afford 2.2k mortgage payments with 5500 net monthly income, but only you know your exact circumstances.

Atomix

We had a slightly similar dilemma.

It wasnt the monthly figure that put us off, it was the length of time.

2200 every month for nearly 30 years....

In x10 years ill be mortgage free and 54. (800 a month) which means i can sleep at night.

Good luck - youre right to worry, but its the 29 years i would worry about.

Crashy_Time

shinytop wrote: »

OP, if you like the house, think it's a good price and can afford it, just go for it and enjoy your new home! It sounds like all of these apply for you. Five years is a long time and there will be other good mortgage deals available then.

How do you know this?

Crashy_Time

sal_III wrote: »

Not quite, the interests are only based off the initial amount borrowed. Only the repayment is based on sale price / RICS valuation.

The chances of interests rates being much as high as 4.7% in 5 years are very slim. Even then you should be able to afford 2.2k mortgage payments with 5500 net monthly income, but only you know your exact circumstances.

How do you know this?

AdrianC

AdrianC wrote: »

And at 1.8%, you're repaying £1,650/mo. So it's ~£550/mo difference. What's your household monthly income, after tax?

Jojo6 wrote: »

After tax, we bring in around 5500k

So even £2,200/mo is going to see you with £3,300 clear per month - £110/day - for the rest of your lives and expenditure.

The £550/month difference that you're worried about, which may or may not come about through interest rate rises, is 10% of your monthly household income.

You can afford it. Easily.

Whether it fits in with your current pattern of other expenditure... If you're earning £110k/year, about 4x the national household average, and still have debts... then I think you may need to consider prioritising a bit harder.

readysteadysell

its a big step up and you are right to be a little nervous. we are stepping up from a £500 per month to £1400 and although we've calculated we can afford it, it's still that extra cash you have to put out every month.


try to sit down and work out what the minimum you need each month to live on (clothes, food etc), add the mortgage payments and see what you are left with.

Crashy_Time

https://www.marketwatch.com/story/here-are-five-things-to-know-about-the-recent-repo-market-operations-2019-09-18

Crashy_Time

Atomix wrote: »

We had a slightly similar dilemma.

It wasnt the monthly figure that put us off, it was the length of time.

2200 every month for nearly 30 years....

In x10 years ill be mortgage free and 54. (800 a month) which means i can sleep at night.

Good luck - youre right to worry, but its the 29 years i would worry about.

Many people will be paying even longer nowadays?