Would you consider doubling your mortgage (in cost per month) ??

[mosschops30]

We really need to move. Live in a 3 bedroom house and have no.3 on the way. Although we can manage where we are its not ideal.

So weve been looking for a while but because when we finally move it will be pretty much long term, as we know we will have children at home for at least 18 years, so the next house will be our final move before retirement, so weve been pretty fussy, we know what we like, what we want and where we want/need it.
However all the houses we see have some little niggle, apart from the ones out of our 'price range' (we had said no more than 250k.
The ones we really like are 320k, which would mean our monthly mortgage payment would double and we would have to increase our current years left (16) to 22 years, although we would still only be 56 and 58 by the time it was cleared.

Would you do it? Or is it too much and too risky? It would stretch us but not so we were living on the breadline (i think)

IO alone is utterly utterly insane

I'll be amazed is any banks are doing THAT now!

I don't understand that you're so desperate to move to "the house" (for life) but then in the next breath say if interest rates rocketed you'd just sell up and rent.

If I were ever in position to buy the house on the opposite side -of the school- my "it house" I'd made damn sure I'd got enough "spare" money to cover high interest rate payments in the future.

I couldn't risk losing £120k - if you lose that would you ever be able to get back on the housing ladder in a property like the one you're thinking of buying, or even like the one you have now?

Interest only did you say?

I wouldn't

Really

I wouldn't

I'm with Noddy and Morning Paper on the general advice.

Sounds like you have let yourself get an emotional connection to this particular house - always a dangerous thing to do.

I'd say, make "cheeky" offers to houses that appear to fulfill your criteria and you might get lucky. Don't get emotionally attached to any house, just be sensible about if it fulfills your criteria.

Research shows apparently that it's generally the 3rd offer that gets accepted on a place when negotiation is involved so keep that in mind.

FWIW the auction houses are predicting repossessions to start appearing on their books again in greater numbers so they don't think "it's all over" when it comes to property price stabilisation.

We are interest only because both of us receive high bonuses regularly so we pay off chunks of our mortgage regularly if you see what I mean.
We could switch to repayment if those bonuses stopped.

I think interest only is ok if you have the means to repay early, otherwise it's only good as a temporary measure if you need to reduce monthly outgoings for a short term issue.

If you don't desperately need to move straight away (and a 3 bedroom detached with 3 children is perfectly do-able IMHO) then why not save really hard for a few years rather than paying thousands of pounds in interest which is just dead money if you're not paying off the equity. Then you'll have a bigger deposit when you do move and you'll have a chance to see whether realistically you can spare the extra money each month, plus you'll be in a better position to be paying off the capital. Or overpay massively on your current mortgage so you've got even more equity when you do move.

I think it's unlikely house prices are going to rise much in the next few years (if at all), so you're not going to lose out from that pov, plus if prices do crash it should benefit you as you're planning to move up the housing ladder.

lol, indeed mutt

Ooh plenty of people not listening on this thread ... not just me!!!!

At no point have I said that 'i dont believe rates will ever be 12%' (unless someone else can find that, because I cant)
Nor have I said that we would buy this house on an interest only mortgage, I just said that it would have to be an option if rates did go high again.

We more than doubled our commitment last time we moved and it was fine because our income had also more than doubled.

But now ? No way, no how. Not our mortgage anyway. We simply couldn't afford to do it, not if we wanted to y'know eat and keep warm as well.

You will need to check then that your mortgage provider will ALLOW interest-only breaks

Because your definition of 'high' isn't really high at all - it's a fairly normal tracker at the moment, with the average base rate over the last 20 years.

mp I dont know anyone who is paying 12% atm. And of course we would check all those things and look into it in greater detail than we have so far

No-one is paying 12% at the mo because the base rate is being kept very low to encourage people to spend. But that isn't going to last.

I thought you just said 'fairly normal tracker atm' which is why I said that

Actually we did just what you are comtemplating (or should that be )!

Our mortgage was over 4 x joint salary, but just about manageable. For the time being we have a 25 year term, but our aim is to remortgage every two or three years and reduce the term by a year or two.

We have a fixed rate (actually wish we hadn't cos we're locked into a stupidly high rate ), but at least with a fixed we know what our outgoings are.

we also figured that one of dh or I would have pay rises at least every year, usually both of us, and a £2000 a month mortgage would be like chicken feed in 10 years. Well relatively...

So I'd say go for it. Get a fixed rate mortgage. Get redundancy cover. Get some savings behind you in case things go tits up. If things still go tits up you could always extend the term of your mortgage again, or go interest only as a short term measure.

Good luck

'tis a fairly normal tracker at the mo (4%) with the base rate of the average for the past 20 years (8% I thin ksomeone quoted earlier) - while it may not happen, it is a possibility.

See here si the average rate over the last 20 years 20 year graph

Been much lower under labour hoho but still shows that it is very odd at the mo: 10 year graph

interesting innit?

400 year graph

Have a look at this article

Personally, as I've already said, I would save hard for a few years rather than get massively into debt on an interest only mortgage, but obviously it's up to you.

FFS!!!! WE WOULDNT BE GETTING AN INTEREST ONLY MORTGAGE!!!!

(sorry but having repeated that fact numerous times I felt the need to shout it out )

yes if interest rates went up to 12% or higher, not if we remained on the rate we are on now (which we will be for 3 years, just renenwed transferable fixed rate mortgage). I would not consider going into a mortgage on interest only because rates are never going to go lower than they are now. Maybe I didnt make that clear

Anyway house is sold {smile] so obviously not meant to be ours, but there are 2 cheaper ones I have seen (to the tune of about 50k cheaper )) which at 12% would still only make mnortgage payments £1600