I'm a bit scared of going below 75% LTV cos it's so bloody expensive. I wouldn't even countenance the idea of trying to borrow a deposit on an unsecured loan. I seriously doubt anyone would lend you money if they had an inkling that was what you were doing too. Effectively that is a 100% mortgage, with part of the borrrowing on a much higher interest rate and much riskier lending as it is unsecured.
Madness, imho.
This is a useful calculator - you can work out all sorts of combinations...
http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator
There was a time not that long ago everyone was borrowing 110% of the home value to cover all the associated buying costs, then fitting the house out on the credit card too.
Madness.
kinda lucky with our landlord at the moment, in 3 years he only put the rent up 25pounds a month, could easily go up again at the end of our current contract but at present its cheaper than smaller places locally! hugely unefficient gas flow heating system thingy and a hot water tank we cant put ona timer so monthly energy bills make up the difference annoyingly haha
So your landlord's a cheapskate with his properties and you think that's lucky?
Philc - we met with a financial advisor last week (first house buying). The size of deposit makes a huge difference. At 75% LTV you are looking at 2.19% interest on a two year tracker, as the LTV goes up the rates get progressively worse until you are looking at approx 6%, thats with a base rate of 0.5%!!
On the same loan (approx £300k), that is a monthly outgoing difference of about a grand iirc.
Renting and getting a decent deposit together has to be the way to go. Sucks short term, but your long term prospects are much better (earlier repayment, lower monthly mortgage payments, equity position etc)
we're lucky in that we've got a place to live, and considering the going rate locally for similar properties we're lucky that he hasnt put the price up accordingly. smaller places in worse condition cost more than our current place.
the energy bills should go down by a fair old percentage when housemate moves out as he's rubbish at turning things off, leaving the oven on, leaving the hob on and such.
I get your point though flaperon, but in our current situation and sense of job security we're just happy to have the place we've got and a landlord that likes us/knows we're not trouble 
Renting and getting a decent deposit together has to be the way to go. Sucks short term, but your long term prospects are much better (earlier repayment, lower monthly mortgage payments, equity position etc)
you need to rent smart though ..... my missus wanted to rent a house that was 25 miles from my work and 25 miles from her work = 500 quid a month in fuel ..... took alot to swing her round she really hadnt thought about the future at all - said if we move here its financial suicide. Bit gutted to be leaving our current rental though - its a dream house !
every now and then i get myself down thinking about money, renting and all that stuff.... thank you everyone who's commented on here, feel much more positive now
sorry JT for crowbarring a few extra questions into your thread!
JT - not a good idea to get a load for deposit and the banks just won't go for it. They need to know your depts (including loan and Credit cards) and will see straight through what you are trying to do.
I would save or borrow from M&D (the banks like this), the housing market isn't going anywhere for the next few years so you've got some breathing space whilst house prices stay the same.
I brought my first house a few months after the crash and its worth the same now as it was then. I'm going to sell soon and go back to renting. Gonna save some more money and then wait for the ideal project/rebuild property.
Just a thought....
If you don't have to live down south (some people take more convinceing of this than others) then the cheeper housing 'oop north can be used to your advantage.
eg........
For the cost of an interest only mortgage on a flat in Wokingham, I can get a 10 year repayment mortgage on a 3 bed house in North Yorkshire. In 10 years I've got a 3bed house worth something (hopefully more than i paid for it) whereas darn' sarf' I'd still only own what the deposit bought me.
Just a thought....If you don't have to live down south (some people take more convinceing of this than others) then the cheeper housing 'oop north can be used to your advantage.
eg........
For the cost of an interest only mortgage on a flat in Wokingham, I can get a 10 year repayment mortgage on a 3 bed house in North Yorkshire. In 10 years I've got a 3bed house worth something (hopefully more than i paid for it) whereas darn' sarf' I'd still only own what the deposit bought me.
quite, although, with asset appreciation, the figures can be turned around.
lets say 10 years interest only @2% @ £1000 pcm gets you a house worth 600k - yet a 10 year repayment mortgauge @ 2% @ 1000pcm = £108k. if over your 10 year period prices go up 25% (not an unreasonable amount, given past performance), the houses will be worth 750k and 135k. If you sold both houses, you'd have £150k from the southern house, but £135k from the northern house.
Obviously, low interest rates skew the figures somewhat, as does capital appreciation, but interest only can make sense. You also get to live in a 600k house for 10 years instead of a 108k house
I can get a 10 year repayment mortgage on a 3 bed house in North Yorkshire.
Our 2 bed end terrace (with extra loft room that can't be classed as a room for some stupid legal reason) is valued at £300k.
Edit - flats in Harrogate.... :-O
http://www.rightmove.co.uk/property-for-sale/property-30274537.html
http://www.rightmove.co.uk/property-for-sale/property-16055160.html?premiumA=true
If you live somewhere like we do where house prices are fairly cheap then saving whilst renting can be really hard. We're in the process of buying and our mortgage payment (repayment mortgage) will be 75% of our monthly rental so it'll be much easier to save once we've bought!
A friend bought a house in her name only and her partner got an unsecured loan for the deposit, last year so not in the crazy lending rules period.
I do think there are certain circumstances where a loan for a deposit is not as crazy as you might think.
There are plenty of 2 bed terraced houses for sale in Derbyshire for a good chunk less than 100k.
Easy access to Derby and Nottingham and loads of industry in the area.
eg...
http://www.rightmove.co.uk/property-for-sale/property-34107818.html?premiumA=true
lets say 10 years interest only @2% @ £1000 pcm gets you a house worth 600k - yet a 10 year repayment mortgauge @ 2% @ 1000pcm = £108k. if over your 10 year period prices go up 25% (not an unreasonable amount, given past performance), the houses will be worth 750k and 135k. If you sold both houses, you'd have £150k from the southern house, but £135k from the northern house.
I'd re-phrase that to this.....
if over your 10 year period prices go DOWN 25% (not an unreasonable amount, given past performance), the houses will be worth 450k and 75k.
Meaning the northern one owes me nothing as I'd have circa £25k as a deposit on either house, the one down south I'm now in £125k of negitive equity!
And, I'd bet money on prices down south falling a lot further than northern ones over the next 10 years, up here there's a stock of afordable housing, in Wokingham I think the cheepest houses are £160k for 2bed flats, unless you count static caravans.
I think Age has alot to do with it . Id be in mre of a hurry to
Get my hands on some property if i was in my late 30s how ever im only 25 !
And yes interest only mortgages are just silly at the moment ! I
Certainly wouldnt bank on prices going up an infact they have probably contributed to the stagnant buyers market atm as folk cant shift them at what they need to clear their debt !
We borrowed 5% on a three-year unsecured loan and 95% on a mortgage for our first house. This was 1994 and 5% was £3500. As I recall, we were open and honest with the bank, but they weren't bothered either way. It could have been for a car. Paying off £15K in three years is a more substantial commitment, however mortgage rates are lower now, so total repayments may be manageable.
if over your 10 year period prices go DOWN 25% (not an unreasonable amount, given past performance), the houses will be worth 450k and 75k.
You think houses will drop 25% nominal value (ie not including inflation adjustments) over 10 years? I don't think house prices have ever been negative over a 10 year window, they can head that way on a temporary basis, and I'm not excluding the fact that they *could* drop by that much, but I'd imagine a 25% raise (which is only 2.1% per year for 10 years) would be much more likely - even that would be an inflation adjusted drop of approx 20%
wrt wokingham - within the town limits there are some one bed places for £125k. this is fairly pricey, but if you have a 20% deposit, a 4x mortgauge would be available to a couple earning 12.5k each - barely above minimum wage. I don't think places like that have a huge distance to fall unless mass unemployment hits home (at which point everything gets a bit 'tin foil hat')
ah when i were a lad we borrowed the 500 quid for the deposit for the 24500 mortgage on the 25000 house, i was only clearing 76 quid a week at the time and the monthly payments for the mortgage were 225 i think.. the rent on our bedsit was 61 a month.
How about buying a house on an interest only mortgage and over paying every month?
You dont pay any fees at all to over pay on interest only..ever.
Providing you are okay with the structure of it...it can work in your favour
Hi All, thanks so much for a wealth (!) of information.
Living anywhere else is not an option, my fiance's field of work is quite specialist and not only does she love her job, moving up north to save £25k over some random amount of time doesn't make sense. I'm from Sheffield and she is from Ontario, plans are ultimately to head out to her home turf. Anyway, I digress.
I think what we'll be doing, given the current financial climate among other factors, we'll be living 'cheap' and saving what we can. We're in our early 30's and after much, much deliberation, borrowing to 'speed up the process' doesn't really, looking beyond the financial asset, make much sense. Assuming we start a family and either of us takes time out of work, pa/maternity pay doesn't go on forever and we have to take that into account in our planning for the future.
We did some regular savings type calculations last night, each of us putting £200 a month into an account over 4 years means we can have over £20k in the bank. Which assuming we put a 5% deposit down means we can quite reasonably afford a house without getting too much hassle.
Yes it's a major inconvenience and not particularly enjoyable to be paying off the mortgage for mr/mrs property owner, however, it means that when we are ready to move we will be in debt to just the mortgage company - and that's got to hopefully not only make us more attractive to the lender, but also offer us peace of mind knowing that we have one large fiscal commitment and not 2.
jt
good plan .
we have found a pair of houses in places we would actually like to live - oddly according to the landlords they have had very little interest in either - perhaps it is because we like shitstick no where 
- accessable by landrover most of the year round haha
- both within cycling distance of my work and 1 in cycling distance of her work - we are fighting again haha... she likes the one furthest from her work but i think its small and overpriced due to its size - feels like a holiday home.
gives us a chance to top up the deposit to get on the better rates - saves us so much more long term - 8k in rent this year provided we save 5k aswell would save us 30k over the mortgage term ! - what i need to avoid is the missus trying to convince me to overstretch us on the house returning us to a 5%/10% deposit !
sounds sensible good luck JT!
if you're planning to move to canada in the medium term (lets say in <5 years) you're probably financially better off not buying a house anyway. Once you factor in stamp duty (you might be able not to pay that), solicitors fees, moving costs, then estate agent fees when you come to sell etc, its probably better value to rent in the short term. Buying also diminishes the ability to leave the country at short notice, should you so desire
dunno what rental prices in canada are like but in ABZ the way things are at the moment you could buy a house - go to canada and get tennents to cover your mortgage and some pretty easy if you buy sensible(hence although i rent in no where ville i wouldnt buy in nowhere ville) .... given there are very little new builds going on i cant see that changing anytime soon. thats my justification to my self as due to my job i could be moving regularly once qualified
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