Looking for some advice/opinions

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Mhts
Mhts Posts: 3 Newbie
in Mortgages & endowments
Hi everyone,
I've just joined the forum and was hoping to get some input on something.

I'm a first time buyer about to buy my first house. To keep it simple here's how things break down, I have a good deposit and the ability to over pay on my mortgage to maximum aloud every month, I will be able to do this comfortably indefinitely.

What mortgage type would you go for in my situation. I am considering doing a 30 year mortgage (to allow flexibility with a 10 year fixed initial rate as I will be able to pay the house off in just over this amount of time (to avoid the charges of repaying during the initial deal term). I can't really think of a better deal to go with than this when considering my circumstances but any advice or opinions would be welcome. To give some context I am 35 with no dependants or debt.

Thanks, look forward to hearing what you guys think.

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  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    What's the LTV
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Why a 30 year term. If the mortgage is affordable with capacity to overpay. Start at 25. Flexibility is all very well. Though always a temptation to spend the money elsewhere whatever your intentions at the outset.

    That way you will have a built in safety margin should you wish to extend the term at a later date. Interest rates may not remain low indefinately.
  • Mhts
    Mhts Posts: 3 Newbie
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    Thanks for replying,
    A 30 year term because it makes monthly payments lower and allows for any unforeseen circumstances.

    As for temptation to spend elsewhere that's not really an issue for me, as I said I'm 35 with no debt I don't believe in living beyond my means.

    What I'm after is some advice on what mortgage product suits me best, 10 year fixed? Variable? Tracker? I can't see anything better than 10 year fixed at this point as I can have it paid off in under 11 years without inccuring any charges other than an exit fee of around £195.

    If someone can see a better angle on it than I am I'd really appreciate the insight.
  • Mhts
    Mhts Posts: 3 Newbie
    edited 24 February 2019 at 6:21PM
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    Ltv 85-90% at the moment, may reduce as not seeing any property I like at the minute
  • AliceBanned
    AliceBanned Posts: 3,048 Forumite
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    There is usually a maximum amount that you are allowed to overpay. Have you factored this in? I think it's often around 10% per year but others may have more info on this.


    Otherwise I personally would go for five or ten year fix as interest rates can only stay the same or go up.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    edited 24 February 2019 at 7:07PM
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    Mhts wrote: »
    What I'm after is some advice on what mortgage product suits me best,

    That's really down to personal choice. If you would like certainty of what the monthly repayments will be. Then a fix is the way to go. Particular if you believe that the debt would be fully repaid in 11 years or so. You would be also be unaffected by any upward move in interest rates.

    Does the product come with a high arrangement fee. This needs to be factored in when making comparisons with shorter term products. As we don't know the amount you intend to borrow.
  • dimbo61
    dimbo61 Posts: 13,716 Forumite
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    Consider an offset mortgage if you think you can and will have the ability to overpay/save into the offset account.
    Lots of posts on the Mortgage Free board about people using Offset to clear the mortgage quickly.
  • miss_undastood
    miss_undastood Posts: 236 Forumite
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    We have a 10 year fixed rate. We can only overpay by 5% rather than 10%. Had we have got a 5 year fix with the same bank we would have been able to overpay by 10% so make sure you know what you’re signing up for.

    Also things to consider. We had a 6% ERC for the first 5 years and it’s now dropped to 3% now we are in years 6-10

    Will your circumstances change in the next 10 years? What if you met someone? Had children? Would you need to sell - the ERC May hit you hard unless you’ve factored this into your plans.

    We took ours out over 35 years too. We were 28 and 31 at the time and 9m later a child arrived so being on a fixed rate gave us security.

    However we could now get better rates than we did when we took it out in 2013. However we can afford the rate we are on, and the savings are quashed by the ERC. You have to be happy with the rate you’re paying.

    We looked at a chart of the base rate and 3-4% for a mortgage didn’t feel unreasonable to us...

    ...it’s all a gamble and a risk. But you have to work out what is important to you and what might happen in the next 10 years - it’s a long time
    Mortgages Oct 2020: £308,283 Jul 2021 £286,600 October 2022 £253,456 MFW-22 #9 MFIT-T6 #35
  • joe4560
    joe4560 Posts: 6 Forumite
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    Well out of fixed and tracker, you obviously want to go fixed at this point in time. Interested rates are only really going to go up from here. So I guess the only real concern is about the overpay?
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