Buying in current climate in London

[SarfE4sticated]

Hi all, you have given me excellent advice previously, so I wanted to pick your brains again.
My DD has got into our second choice local secondary school, but in the rather more expensive part of our area. We need to move from our 2 bed flat because it is too small for us, and we had planned to move to a cheaper area where our first choice school was.
I had a crazy thought in the early hours, that maybe we could buy a place in more expensive area and finance it thusly -
1/3 cash (from our equity) 1/3 interest only mortgage 1/3 repayment mortgage. We would only need to live there for 7 years, and if we bought somewhere that needed work, we could add value to it. Is this madness?
Both DH and I are in our late 40s with stable jobs. What do you think?

I think if you're in your late forties you need to be thinking about paying off your mortgage. Not adding to it. Not helpful I know, sorry.

Also, do you know if you can get 2 mortgages, one repayment one and one interest only? Have you taken financial advice?

No I haven't yet NotSuchASmugMarriedNow1 sought any professional advice yet - the idea came to me in the early hours of the morning, so no chance to ask yet.

how many kids have you got and how much longer does your current mortgage run for?

one child, and we have ten years left until our current place is paid off.

Personally I would stay put, start paying down the mortgage earlier, upping my retirement savings and putting together a university fund for your dd. Imagine how much financial help you could give her when she goes to uni if you didn't have a mortgage to pay.

Current property market very unstable at moment in my opinion

OP,
Can you move to a cheaper area where you can a house in your budget but it is well connected to the more expensive area by bus. In secondary school lots of children travel on their own by public transport and school need not be in walking distance.

I wouldn't unless you have a plan to pay off the extra third of the house price another way. Otherwise would say its too risky in this market.

Waiting lists do move quite a bit though so the area by the first choice school may be viable. If you move close to the school you could potentially go up a lot on the list - we went from last on list to first by moving but you need to research very carefully. Do some research on that maybe consider moving. Where are you on the list now? Could you get to that school from current area. Both our schools moved around one a week - will vary by area and no guarantees but that could be an option. If you are low on list and can get there it could be you don't need to move.

I would definitely do it. Always get the biggest mortgage you can afford.

Now is the time to buy, too. Bargains to be had.

You'll get loads of naysayers but we've made good money from always getting the biggest mortgage we can afford, through good times and bad.

Thanks everyone for your views, I will find out on Monday where we are on the waiting list, and then I'll contact my broker and see what he says. Thanks everyone.

But Penguin has vg advice re: you might end up with first choice school.

We are also London and there is SO MUCH movement between now and September. We got our third choice school but ended up with our first choice by May. Friends got an awful school that wasn't even on their list but ended up with their first choice school by September.

Do bear that in mind. London is so transient that it moves way more than you ever think it will, I promise.

(But I would go for it with the mortgage though!)

Thanks Ivegotthree for your comforting words! Will let you know what the broker says :D