Best method to pay back Help To Buy Wales loan?
MJR1990
Posts: 2 Newbie
At 27, my girlfriend and I have just bought our first house! We are seeing it as a house for life at the moment...
Basic details:
House cost: £170,000
Deposit: £8,500
HTB: £34,000
Mortgage: £127,500
Combined income with girlfriend: £40,000
Monthly outgoings: £1,200
Remaining savings: £5,000
Mortgage (fixed, 5 years): £500p/m.
Realistically, we could save between £800-£1200p/m - but I don't want to save that much as after saving for the house I'd like us to 'live' more now, eg go on our first holiday abroad etc.
I'm basically just mulling over what to do about the HTB loan. If things stay the same, we will not be able to save the £34,000 over the next five years before interest kicks in, due to that basically meaning not having much of a life for the next few years.
I will need a new car soon, things will break, etc etc as well. So I need to be realistic with my plan.
Our incomes are unlikely go up where we live (west Wales).
So, does anyone have any advice? Put away a modest amount each month in an ISA, let interest build up, and try to pay it back in 10 years?
I do realise house prices will impact what we have to pay back ultimately.
Thanks in advance for any advice!
Basic details:
House cost: £170,000
Deposit: £8,500
HTB: £34,000
Mortgage: £127,500
Combined income with girlfriend: £40,000
Monthly outgoings: £1,200
Remaining savings: £5,000
Mortgage (fixed, 5 years): £500p/m.
Realistically, we could save between £800-£1200p/m - but I don't want to save that much as after saving for the house I'd like us to 'live' more now, eg go on our first holiday abroad etc.
I'm basically just mulling over what to do about the HTB loan. If things stay the same, we will not be able to save the £34,000 over the next five years before interest kicks in, due to that basically meaning not having much of a life for the next few years.
I will need a new car soon, things will break, etc etc as well. So I need to be realistic with my plan.
Our incomes are unlikely go up where we live (west Wales).
So, does anyone have any advice? Put away a modest amount each month in an ISA, let interest build up, and try to pay it back in 10 years?
I do realise house prices will impact what we have to pay back ultimately.
Thanks in advance for any advice!
0
Comments
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Overpay mortgage as much as you feel appropriate and then see where you are at in 5 years, the loan payment wont be that much at all in the 5th year (Think its £50 a month for you) so dont panic.0
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Probably a stupid question, but why overpay the mortgage, rather than put that 'extra' money aside to pay back the HTB sooner?Overpay mortgage as much as you feel appropriate and then see where you are at in 5 years, the loan payment wont be that much at all in the 5th year (Think its £50 a month for you) so dont panic.0 -
You are more than likely paying a higher rate of Interest on your mortgage than you can get from savings.
Paying extra every month on your mortgage helps build up equity and reduce your debt on the property.
£100 a month means you will have paid off £6,000 in five years
£200 a month overpayment each month will mean over £12,000 and saved interest.
£500 a month is £30,0000
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