Deposit for a mortgage or keep renting?

[peacoat]

Hi all,

I've been daft with money and have ended up in debt, but I think I'll be able to pay it off by July 2016. I'm putting away about £1000 per month into the debt at the moment and so once this is paid off, I will be able to save that much. My question is whether I should save for a deposit and get a mortgage, even if it means that I won't stay in it for many years, or keep renting? There is a chance that in 4 years time I will move out of the UK (i.e. have a mortgage for 1 - 2 years) but there is also a chance that I will be living in it for another 6 years or even longer.

Which is better: to buy and have the money that would have gone to rent to go straight to a mortgage, even if only for 2 years, or just keep throwing money away on rent? I'm currently renting in London for around £1000pcm so I can easily afford mortgage repayments when I get that far.

I know it's a few years away but I like to get my head arranged.

Generally speaking, it only makes sense to buy a property if you're going to be there at least 3 years (what with fees, stamp duty etc). You could end up paying out quite a lot for those and it may be that you'd have been better off renting.

I think, if you have cash to spare, it will benefit you more to pay down your debts quicker and keep renting than it would to save for a deposit. Downsize maybe to a cheaper place? Mortgage lenders are also far more keen to make sure borrowers can afford their loans and the process for getting a mortgage is pretty rigorous. If you have big debts outstanding you may not qualify.

Right - fees and stamp duty is probably the deciding factor then? Cogito I'm fast forwarding a year or two ahead when my debt is gone. Thanks for the insight. I'll consider how long I'm realistically going to stay here and if I'll live in it longer than 3 years that would be a definite yes.

I'd love to downsize to somewhere cheaper, but I live in London and only 10min cycle from work so I have no travel costs and it's super convenient.

I don't think you're throwing money away on rent as in your position it gives you the choice to move quickly.
I would pay off the debt and once it's gone save the money in the best account to accumulate a deposit for the future, you will have to be disciplined to keep saving. You will then be in a strong position to buy later on.

Alternatively, if you do decide to buy, could you rent it out while you are away? This is assuming you will return at some point.