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[Closed] Renting Vs Interest Only Mortgage

amt27 · 2013-05-25T20:46:38Z

decided to visit a nearby housing development today, wife to be and myself are looking to get on the property ladder at some point, but deposit is an issue, ideally we want something older to add value too, but looking at the figures and the governments new build scheme is making it attractive, the idea of the scheme is the government help you out to make up a 25% deposit and after 5 yrs your earning more and can afford to repay it, anyway this is a hypothetical situation: we currently rent 2 bed house for £x a month, house at the development is 4 bed and huge (it's twice the price of the rented house), we would need 5% deposit to buy, government give out 20% interest free loan for 5 yrs with no repayments for 5 yrs, bit of googling I find an interest only mortgage fixed for 5 yrs for £x (same as current rent) so buy house, live in it for 5yrs, fixed price per month, if after 5 yrs wages haven't gone up enough, walk away, all we lose is deposit which over 5 yrs isn't much and would be the similar to any rent increase on current property, boom and bust baby,

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footflaps

Posts: 13594

Free Member

I blame stamp duty - it would be more sensible if people could right size to the house they needed, up or down, without a huge financial penalty.

+1, makes no sense to move when I can (almost) get an attic conversion done for the same cost as stamp duty....

Posted : 27/05/2013 8:51 pm

glupton1976

Posts: 0

Free Member

someone would be happy to rent me a property again if I walked away at the end, no?

Not a snow flake's chance in hell.

Posted : 27/05/2013 9:02 pm

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