95% LTV in todays buyers market

[fbnono]

Finally got our deposit, but we’d be fools, right?
It’s hundreds of pounds cheaper to stay renting and our rent is housing association so only goes up by a tiny percentage each year. We would only be able to afford something small not our forever home so would have to move at some point so we need to think about the chance of negative equity , stamp duty & all things like that

We did a 95% mortgage when house price rises were outstripping savings and interest rates were low (because a 95% rate is quite a bit higher than 90%) within 2 years we'd built enough equity to remortgage at 85% LTV.

I don't think it would make sense to do now we are in the reverse situation, you don't need to rush onto the ladder and it could be risky too, especially as asking prices on Rightmove still seem a little aspirational! You'll pay a lot and will be at risk of negative equity. I'd get the deposit into savings, and watch the market over the next year. When you have a 10% deposit I'd look again.

Thank you, those are our thoughts too. It just seems too volatile atm but I feel sad at the prospect of knocking back other plans (which we wanted to do asap after buying a house) new car and TTC.

I feel for you OP, we were late to buying (after having kids) but got there in the end, I'm sure you will too.

Thank you x

Don't rely on there being a crash. I know someone who has been renting for decades because they were holding out for a price crash and then got priced out because they didn't buy when they could.

Personally my recommendation would be to buy when you're able. The way I look at it is you're paying X amount in rent a year, so even if the market drops by that amount you'll be better off because it's your own property. It depends on your circumstances of course, your rent level and how secure you feel. I was renting privately.

The key thing is to work out what interest rate percentage you could afford your mortgage payment to increase to. If you're maxed out at the current level then it's not a good idea.

you also need to think long term, when on a pension you will still be paying rent. If you buy in 25 yrs the house is yours.

Any examples? I can only find Chip at 4%. I'm looking to make the most and every penny counts!

Look on Martin Lewis, he has several listed

It would be more like 35 years, and I’m worried about not actually enjoying life in that time due to being so house poor

Cheers, that's where I always go but there's a couple more appeared since last week. The only true current "easy access" ones are Cynergy and Oxbury, the rest either have constrictions on deposit/withdrawal amounts, or limits the number of withdrawals per year. I'm with Chip, they put their rate up yesterday but hopefully it'll go up again soon!

Are the 95% LTV mortgages still available now in reality? I know there was all the fanfare a couple of months ago, but have you discussed this with a broker?

Yes they are, plenty of lenders offer them

If you have a child and try to get a mgage you won't get the same amount of money loaned!

First off they account for dependants and add to that you might be working part time or not at all.

You absolutely would be better to buy before TTC. If you try after baby arrives you may find you simply cannot buy at all.

It's worth bearing in mind every pound spent on rent you may as well set on fire for all the good it does you. Yes it is relatively cheap and a good value rent but the money is gone and you get none of it back.

We will only need a day of childcare. Plus, subsidised childcare is set to come in from 2025 so that one day a week would be even cheaper. We have the deposit saved, that’s not changing. What would be difficult is having reduced/no income in maternity leave and trying to pay an astronomically high mortgage thanks to the rates… so not sure