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Ftb Mortgage V Renting And Saving Calc.

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I put this together the other day to try and work out whats better, getting a mortgage or renting and saving the difference.

You have to put in different values to get an idea of how things could turn out. Maybe at some point I will write some code to try out all the different possible values.

I would be interested to see what other issues I might need to factor in. Not having ever owned a house I am not sure if there are any other hidden costs. Also how exactly does the monthly payment thing work, I wrote a formula to guess at what your monthly payments should be initialy, but don't these change over time? I don't think it is perfect so if you can see any flaws that would be great.

I would be interested to see what discussions this prevokes.

One thing i noticed is that if you don't have much of a deposit, the rate of house growth doesn't need to get to zero before you are better off renting. Also for some cases there is a right amount of time to rent for before its best to get a mortgage.

There are also hidden columns in there were you can put things like yoy house price increases in for every year etc. rather than one for all 25 years of your mortgage. Maybe I will be able to do something to enter in trends. I suspect I might have to move to something like matlab to do this as it would be fiddly in excel.

mortgage.zip

mortgage.zip

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I put this together the other day to try and work out whats better, getting a mortgage or renting and saving the difference.

Many thanks for bothering to put this together and donate it to us.

I can't comment on whether it makes financial sense - have to really look at it, but it doesn't look totally unreasonable at a first glance. I've been thinking about putting something like together myself, so at the very least you've given me a good head start,

cheers,

AFineMess

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Many thanks for bothering to put this together and donate it to us.

I can't comment on whether it makes financial sense - have to really look at it, but it doesn't look totally unreasonable at a first glance. I've been thinking about putting something like together myself, so at the very least you've given me a good head start,

cheers,

AFineMess

Well I hope it help everybody understand some of the issues better, it helped me. I have decided I am going to rent for a little bit on the belief that house prices probably aren't going to go up much higher in my area and might possibly go down. I believe that property is a classic boom and bust market, though it is stickier than any other. I want to minimise my risk of negative equity by having a decent deposit and also having decent savings elsewhere. Also I feel it is unlikely I will stay in any one place for 25 years, certainly not the kind of places I can afford, despite being reasonably well paid.

I think fundamentaly there are plenty and growing number of houses for a population that isn't growing so even if house prices aren't over valued now, they will be in the future.

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Well I hope it help everybody understand some of the issues better, it helped me. I have decided I am going to rent for a little bit on the belief that house prices probably aren't going to go up much higher in my area and might possibly go down. I believe that property is a classic boom and bust market, though it is stickier than any other. I want to minimise my risk of negative equity by having a decent deposit and also having decent savings elsewhere. Also I feel it is unlikely I will stay in any one place for 25 years, certainly not the kind of places I can afford, despite being reasonably well paid.

I think fundamentaly there are plenty and growing number of houses for a population that isn't growing so even if house prices aren't over valued now, they will be in the future.

would be nice if you included an overpayment field?

edited to say: forget that i can see you can type in whatever you like for payment.

Edited by Milkshock

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You might want to consider buying and selling costs. The key to determining whether to buy or rent is often the length of time you expect to be in a place. For example, you should include stamp duty when you buy, and estate agent fees when you sell since these are costs that a renter won't have. You are more likely to favour buying if you know you aren't going to move for several years.

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You might want to consider buying and selling costs. The key to determining whether to buy or rent is often the length of time you expect to be in a place. For example, you should include stamp duty when you buy, and estate agent fees when you sell since these are costs that a renter won't have. You are more likely to favour buying if you know you aren't going to move for several years.

Yeah good idea, how much are stamp duty and estate agent fees as a percentage of house price?

Do they go up or down proportionatly to house prices or with inflation interest rates etc?

Or are they so variable I need a seperate field for them.

Also I feel just raising rent by inflation probably isn't quite right, is there somewhere I can get a graph of previous rent trends etc. so I can get an idea of what factors might affect it, such as falling house prices, where more people should be renting.

I would like to make a decent model in excel before I build something I can explore the possibilities on.

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Remember, the calculation will only be valid against an IO mortgage as this is the equivalent to renting.

Not sure I understand.

I haven't made it do an IO mortgage, I guess I could. Would this be of value, its fairly obvious that on an IO mortgage is a dead loss unless you get a decent house price rise.

At the moment it is a fixed rate mortgage, but there is a hidden column of interest rates each year where you could put in the details for a variable mortgage, but you would have to have a good idea of what general trends of interest rates are.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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