To ask for your opinion on buying a house

[Potterpot]

We have 15k saved towards a deposit, which is pretty much 5% so 95% LTV.

Last week a new mortgage product was launched where you just need a £5000 deposit, on any property value (so long as the property value is no more than 4.5x your household income).

If we went with this new scheme the rate would be 5.99% for 5 years 🙃 on a 200k property that’s £1200 ish per month.

We could, however, put £10k down and have a 5% deposit but even then the repayment rate is still about 5.4% at the moment. Not vastly different from 5.99, for the sake of keeping that extra five grand in the bank as a safety net or to do up the house with

What do you think?

I'd probably do it. And if you didn't spend it for some reason you could just overpay the mortgage. Be prepared to potentially be in negative equity at some point. Buy somewhere you intend to stay long term to mitigate that risk. Good luck!

Yeah we are in rented .

There are mortgage calculators that break down the costs - yes the rate is lower - you could save the £10,000 and pay down the mortgage at the next renewal as such.

I would look at the calculators - our worked out this morning the difference between 5 years and 10 years is an additional £76K

It also gave the interest over the fixed period - £31,000 five years -

Because mortgages are now for the short term fixed rate banks want as much as possible.

I’ll see which bank I looked at

What is the repayment at 5.4%?

How long has it taken to save roughly 5k? If your gonna find it hard to build back up, I would put just the 5k down. If you would easily build that back up I would put 10k down and then build your safety net back up before you started doing the house up.

I always think a 10k emergency fund is ideal to have and then overpay the mortgage.

Interestingly I did £300,000 over 25 years on a 5 year fixed rate - and changed the deposit.

You pay more for a higher deposit.

Here

About £50 less

Yes.

So the 5.99% will cost you an extra £600 pet year in interest - if you take that option you would want to balance it out in an interest paying savings account, but the accounts paying a similar rate are usually fixed so your £5k would not be accessible.

@Potterpot is the house somewhere you can envisage living in for a long time, as with a 5% deposit you may end up in negative equity?

Yes

A while tbh! Putting the 5k down is tempting.