Mortgage maths..

[TangerineGreen]

We are due to buy our first house, both first time buyers. I’m not sure I understand how it works when you come to buy your next house... and how much money you have by then.
Perhaps if I show my workings below someone can help.

House costs £330k
Mortgage for 270k across 21 yrs (DH is 45) as 60K cash deposit. Locked in for 5 years with mortgage provider.

So if we cover 1k of actual repayment per month (rest is interest, guessing here for easy maths)
This would be 12x 5 over 5 years = 60K

Then if we sell after 5 years... let’s assume for the same amount to be conservative...
so the new buyers give us 330K.
Our mortgage by then is £210K (as we’ve paid off 60K).
So we then pay off that mortgage, and this leaves us with 120K in cash to buy a new house..? But we’d then need to start off a whole new mortgage on a new house..?

We live in a really expensive area and I’m trying to work out how we could move up the housing ladder with our next purchase after this one.
Thanks in advance.

The first years you are paying primarily interest and not capital.

So the figure will be a shade of £60k paid off.

Closers to 20k

This is a good calculator to see what your mortgage balances will be each year.
www.mortgagecalculator.uk/
If you don't know you figures now you can use a simple calculator like this to get an estimate www.halifax-intermediaries.co.uk/tools_and_calculators/mortgage_repayment_calculator/default.aspx
Once you know what the amounts are you can put them into the top calculator and you can see how much will be outstanding after every full year.

Yes the equity in the house is yours
House prices may go up so your equity goes up -
The solicitors take payment for your property and you can either put all the equity in the new house or ‘save some’ if you want to use it for upgrading the kitchen or whatever

So £100K deposit and £20K kitchen

Either increase the value of your house (extend, refurb etc) and/or take on a larger mortgage (because your salaries have gone up) to get a larger property.

It is the rise in value of the property that usually enables people to move up the property ladder.

That’s really helpful thank you