95% mortgage guarantee scheme

Terrace

getmore4less said:

Terrace said:

Could I please sense check my calculations.

I do rent at the moment 1000£/month
I will have 5% deposit in April of 15000£. 

Looking to buy for 250000-300000£.

Even if interest rate is 1% higher 95% LTV then 90% LTV and there is 2year fix deals then If I buy with 95% LTV would be overpaying roughly 2500-3000£ a year. Over 2 years roughly 5000£ ( intend to overpay the mortgage)

It would take me another 7-8month to save for 10% deposit in that time I would pay another 7000-8000£ in rent.

So clearly I grab 95% LTV mortgage as soon as I potentially can.

Am I missing something? 

Lets go with £250k  mortgage
25 years say 4% and 5% 

amount	rate	payment	owing
£250,000.00	5.00%	£1,461.48	£239,426.74
£250,000.00	4.00%	£1,461.48	£234,332.33

You pay an extra ~£5k in interest over the 2 year fix
put the full £15k down buy at £265  LTV now ~90.2%, should be there with some overpayments


if rent is £1k and you can save £15k in 8 months(£1.875kpm) you easy have £2k to throw at the mortgage.
go with the 300k 15% deposit borrowing  £285  still using 4% and 5%

amount	rate	payment	owing
£285,000.00	5.00%	£2,000.00	£264,536.44
£285,000.00	4.00%	£2,000.00	£258,809.97

LTV 88%  need £2400pm to get to 85%LTV .

Thank you very much. 

Clearly there is no point of saving for another 6month if I can get 95% LTV mortgage.

My aim is to overpay the mortgage by 1000£ a month for the first 2 years while interest rate would be about 5%. And I aim  to get to 85% LTV at least ( might push for 80%) by the end of 2 year fix. 

 I am now paying a rent of 1000£ and save around 1750-1900£ depending on the month. And live comfortably and have got not massive but decent emergency fund.

So would be happy for mortgage payments to be around 2500£ a month for first 2 years. Then would aim for 1800-2000£ a month to pay it off within 15 years in total. 

getmore4less

Terrace said:

getmore4less said:

Terrace said:

Could I please sense check my calculations.

I do rent at the moment 1000£/month
I will have 5% deposit in April of 15000£. 

Looking to buy for 250000-300000£.

Even if interest rate is 1% higher 95% LTV then 90% LTV and there is 2year fix deals then If I buy with 95% LTV would be overpaying roughly 2500-3000£ a year. Over 2 years roughly 5000£ ( intend to overpay the mortgage)

It would take me another 7-8month to save for 10% deposit in that time I would pay another 7000-8000£ in rent.

So clearly I grab 95% LTV mortgage as soon as I potentially can.

Am I missing something? 

Lets go with £250k  mortgage
25 years say 4% and 5% 

amount	rate	payment	owing
£250,000.00	5.00%	£1,461.48	£239,426.74
£250,000.00	4.00%	£1,461.48	£234,332.33

You pay an extra ~£5k in interest over the 2 year fix
put the full £15k down buy at £265  LTV now ~90.2%, should be there with some overpayments


if rent is £1k and you can save £15k in 8 months(£1.875kpm) you easy have £2k to throw at the mortgage.
go with the 300k 15% deposit borrowing  £285  still using 4% and 5%

amount	rate	payment	owing
£285,000.00	5.00%	£2,000.00	£264,536.44
£285,000.00	4.00%	£2,000.00	£258,809.97

LTV 88%  need £2400pm to get to 85%LTV .

Thank you very much. 

Clearly there is no point of saving for another 6month if I can get 95% LTV mortgage.

My aim is to overpay the mortgage by 1000£ a month for the first 2 years while interest rate would be about 5%. And I aim  to get to 85% LTV at least ( might push for 80%) by the end of 2 year fix. 

 I am now paying a rent of 1000£ and save around 1750-1900£ depending on the month. And live comfortably and have got not massive but decent emergency fund.

So would be happy for mortgage payments to be around 2500£ a month for first 2 years. Then would aim for 1800-2000£ a month to pay it off within 15 years in total. 

depending on the rate you may need to keep the initial term down to 25years or less to avoid hitting 10% ERC limits in the second year 

Terrace

getmore4less said:

Terrace said:

getmore4less said:

Terrace said:

Could I please sense check my calculations.

I do rent at the moment 1000£/month
I will have 5% deposit in April of 15000£. 

Looking to buy for 250000-300000£.

Even if interest rate is 1% higher 95% LTV then 90% LTV and there is 2year fix deals then If I buy with 95% LTV would be overpaying roughly 2500-3000£ a year. Over 2 years roughly 5000£ ( intend to overpay the mortgage)

It would take me another 7-8month to save for 10% deposit in that time I would pay another 7000-8000£ in rent.

So clearly I grab 95% LTV mortgage as soon as I potentially can.

Am I missing something? 

Lets go with £250k  mortgage
25 years say 4% and 5% 

amount	rate	payment	owing
£250,000.00	5.00%	£1,461.48	£239,426.74
£250,000.00	4.00%	£1,461.48	£234,332.33

You pay an extra ~£5k in interest over the 2 year fix
put the full £15k down buy at £265  LTV now ~90.2%, should be there with some overpayments


if rent is £1k and you can save £15k in 8 months(£1.875kpm) you easy have £2k to throw at the mortgage.
go with the 300k 15% deposit borrowing  £285  still using 4% and 5%

amount	rate	payment	owing
£285,000.00	5.00%	£2,000.00	£264,536.44
£285,000.00	4.00%	£2,000.00	£258,809.97

LTV 88%  need £2400pm to get to 85%LTV .

Thank you very much. 

Clearly there is no point of saving for another 6month if I can get 95% LTV mortgage.

My aim is to overpay the mortgage by 1000£ a month for the first 2 years while interest rate would be about 5%. And I aim  to get to 85% LTV at least ( might push for 80%) by the end of 2 year fix. 

 I am now paying a rent of 1000£ and save around 1750-1900£ depending on the month. And live comfortably and have got not massive but decent emergency fund.

So would be happy for mortgage payments to be around 2500£ a month for first 2 years. Then would aim for 1800-2000£ a month to pay it off within 15 years in total. 

depending on the rate you may need to keep the initial term down to 25years or less to avoid hitting 10% ERC limits in the second year 

 Yes. Sure. Thanks.
 I guess I can always save up the rest and pay off more before fixing another deal. 

Very grateful for the advice!