First time buyers - Monthly payment seems huge!!

[Walterwhiteswifey]

We currently rent a 3 bed for £1200 a month. We are in the south and trust me this is cheap! We have recently come into money, enough for a decent deposit but houses we want are around 500k.

Right move have mortgage calculators for properties we want, which estimate our monthly mortgage payments will be nearly 2k! Despite a sizeable deposit worth a quarter of the value of the house. Is this right? I'm so confused as I always thought renting was more expensive than owning but we would struggle to pay such a huge amount each month.

I find this all really daunting and annoying as we have such a large deposit but seems we can't afford the house we need.

I was thinking same!
She needs to look her outgoings first.
Somehow it doesnt make sense!

The interest rates have had a massive effect on monthly payments. Speak to a mortgage broker to get a realistic idea of how much it will cost. We're increasing our mortgage from 150k to 250k and increasing the term to 34 years when we move. In a couple of years time when the fix ends, we'll look at reducing the term if rates have gone down or our salaries have increased enough.

The only advice I would have is to make sure you’re really happy with what you’re buying. A lot of people I know have assumed they will be able to sell and move on and then are stuck (due to the market, or mortgage rates, or their personal circumstances). I didn’t expect to still be in our first home by the time we pay off the mortgage but we will be. I love where we live, and it’s a good size for us, but that’s luck more than judgment!

Actually one more thing - if you buy a doer-upper plan for not being able to get trades to do all of the work. In the south east it’s difficult even to get a quote. You need to be able to learn how to do a lot of the work yourself (loads on YouTube, evening classes etc). Again I’ve got friends who had planned to have work done and because more people are staying put and improving their house haven’t been able to get it done.

Buying can be cheaper than renting in that you fix your accomodation costs (interest rate roller costers excepted!), but it can be as much if not more in the first few years.

We were renting a two bed flat in SE London for £1,100 a month eight years ago and when we bought a two bed flat a couple of miles away we paid £800 per month for our mortgage - but we did have a 50% deposit.

Also you have to factor in other costs that renters do not have. We pay £150 per month service charge. Since we bought the flat we have probably paid out about £10,000 in repair, rennovation and redecoration costs.

Just last month our 10 year old washing machine died (inherited from the previous owner) replacing it plus the installation work and some additional work that needed to be done to the kitchen pipework as a result ended up costing nearly £900. We had not choice but to find that money.

And no parently help or inheritance for us. Our deposit was a combination of my savings and money Mr Monkey made on his first flat. He is 8 years older than me and went straight to a good job at 18 with in work training, so was able to buy a cheap one bed ex council flat in his early twenties, 20 years later he sold it for £250k more than he bought it for - right place right time.