First time buyer. Am I totally mad?

[LadyHalesBroach]

Spoken to a mortgage broker. I can get a reasonless size mortgage with my deposit at a 5 year fixed rate of 1.86%.
But in the middle of a pandemic. With a recession on the horizon.
Am I totally mad? I just don’t want to be paying rent lining old landlords pockets anymore.

*reasonable. Bloody autocorrect.

How safe is your job?

Have you spoken to more than one mortgage broker? I would recommend that. We’re buying our first house shortly but we have a 2 year tracker mortgage at 1.09%. We have quite a large deposit.

I wouldn’t at all be put off buying right now if your job is secure. But depending on the size of your deposit, I’d see if you can lock in a lower interest rate. Interest rates are historically low right now so generally is a great time to buy.

If your job is secure and you are looking at a property over the longer term (one that will suit for 5+ years) then I'd go for it

You would be mad to buy at the price level in Jan/ Feb.

Negotiate hard. Find a reasonable worse case scenario how much price may go down in this crisis. Rely on data from more neutral institutions like Bank of England (-16% this year) instead of the likes of Knight Frank (-5%)

Compare the discount you can achieve with the vendor to the worst case scenario. Can you financially handle the potential further fall if it does happen? Would you still feel happy you bought despite the fall or would you feel stupid?

Then there is your answer

Rates are at an all time historical low. They are sure to go up as we get deeper into recession.
If you can lock In 5 yrs do it

We got our first house just as the house prices crashed last time. It wasn't ideal but we had secure jobs and our mortgage was less than rent would be. If it had been a month later we Prob wouldn't have been allowed the mortgage. We stayed a few more years than we initially planned as we were then in negative equity. But that didn't matter unless we sold. We made money on the house when we did sell. So if you plan on staying then it won't matter if you are secure in work.we got a 2 bed so had to move.

Do it! - good rate!!!

Is 1.86% a good rate?! I have literally no idea. Someone could say it’s 3% and a bag of potatoes and I still wouldn’t know.

I’d go on Martin Lewis’ website and read up on mortgages.
Did your advisor not talk you through the different types/options/ rates etc?

I’m assuming on that rate you have a large deposit

Go for it, we started the process before lockdown and have a similar rate around 1.89%.

Also yes it is a good rate, and to PP, we only had 10% deposit so it's not just for people with large deposits.

A silver lining in the covid cloud is how it will benefit first time buyers, so hang tight for a couple of months as prices are likely to drop. If your job is secure go for it. We're hoping this is an opportunity for our daughter to get on the ladder, so watching the market with interest.

Yes I have a large deposit (mum died suddenly last year) and yes my job is secure. I guess I’m just nervous to make the leap. Buying a house wasn’t something I’d ever thought possible and so I’ve never learnt about mortgages etc. And all this chat about a potential recession on the horizon...!

If you are planning on living/ keeping the home for a long time I wouldn’t too much about the recession. A house is a home, and you can always rent out rooms if you lost your job etc.
Yes house prices will dip but interest rates will go up and there will be less properties on the market. I’d be inclined to buy a property soon-ish to lock in rate and be a bit cheeky on the offer. But do read up on mortgages, speak to more mortgage advisors.

Do it!!!!!! Brilliant rate

Definitely do some more mortgage research. I've always been risk adverse and had five year fixed rates. Ive wasted a lot of money on these over the years thinking it was inevitable that rates would go up soon when they really haven't. Have a look into it and make up your own mind but I wouldn't fix at the moment personally.

I locked in 5% my first mortgage!! For 5 years! Looking to sell now and would snap that deal right up!