Sorry if there’s already a thread.
New product launched for first time buyers yesterday where only a £5000 deposit on any property price is needed. The rate is fixed for 5 years and 5.99%.
We are still renting and have a bigger deposit than £5000 but honestly the difference in rate if we put more money down is negligible.
If we put down £15000 the rate is probably 5.5%. If we put down £5000 it’s 5.99%. Not a massive difference and our spare deposit cash could be better used (ie over maternity leave now we have a baby on the way).
So long as we buy a house we are happy to stay in for a while, to avoid negative equity, is there any catch I can’t see?
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99% mortgages…
namechoice · 28/03/2024 16:17
Fast800 · 28/03/2024 16:21
What is your LTV? I can see 5 yr mortgage at 4.19% on the market at the moment.
MissisBoote · 28/03/2024 16:20
If your mortgage repayments were going to be cheaper than your rental AND you weren't planning on moving any time soon then I'd be tempted to give it a go.
I had a 100% mortgage back in the early 00's and wouldn't have been able to buy without it. We've only moved once since. What's your local market like?
funfactjanetisme · 28/03/2024 16:35
I would be enormously concerned about the potential for negative equity with that LTV in this market.
namechoice · 28/03/2024 16:36
Does that matter so much if you stay put in your house?
funfactjanetisme · 28/03/2024 16:35
I would be enormously concerned about the potential for negative equity with that LTV in this market.
namechoice · 28/03/2024 16:36
Does that matter so much if you stay put in your house?
funfactjanetisme · 28/03/2024 16:35
I would be enormously concerned about the potential for negative equity with that LTV in this market.
YouwouldthinkIhavemoresense · 28/03/2024 16:40
Where is this please?
Gloschick · 28/03/2024 16:52
I would be very cautious if you were buying a new house as these devalue a bit like when you drive a new car out of a show room. Even if not new, there is still a negative equity risk in 5 years when remortgaging.
I wouldn't rush into anything. We bought our first house when I was pregnant and our jobs changed and we ended up having to do silly commutes (house had devalued in 2008 crash so we eventually sold at a loss). Sounds like u would be more stretched financially by buying, and you wouldn't be saving money as your rent is so cheap. If the rental is good enough then stick with that. If it is a massive difference in quality of life then it is worth taking the house price gamble.
Gloschick · 28/03/2024 19:30
With your update I would suggest staying. As above, it is a secure cheap rental that you seem fond of.
In terms of money, I've keyed in your figures into a mortgage calculator assuming a £175k property, 5k deposit, mortgage over 25 years. After 5 years you would have paid 66k in payments and paid off 17.2k of your mortgage (so 48.8k paid in interest). Over the same time period you would have paid 39k in rent. Plus you will be responsible for various repairs, moving costs etc
If I were you I would stay put, enjoy your baby and have more money in the bank.
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