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Guest mSparks

Actually No Point In Buying Though

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Guest mSparks

So I'm just about to start to rent my first house...

We had been looking around to buy at the end of last year but financially we weren't ready, now we would be.

however we are just about to start renting a 3 bedroom house for just over £500 per month, this was about mid range in our 'comfy' budget, but its a nice house, centrally heated, and the houses that were more expensive weren't worth the extra money.

If we wanted to buy the same house, at end of last year prices, it would require us taking a mortgage of about £150,000.

from http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml this would be @ an optimistic 6%

£977.83 a month repayment mortgage

£750 interest only.

Even on a repayment mortgage for the first 5 or so years most of the money is paying off interest, so what is the point in spending at least £250 more (interest after all is as much money lost as rent) to risk going into negative equity, and to also have to pay for all the maintenance of the house?

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So I'm just about to start to rent my first house...

We had been looking around to buy at the end of last year but financially we weren't ready, now we would be.

however we are just about to start renting a 3 bedroom house for just over £500 per month, this was about mid range in our 'comfy' budget, but its a nice house, centrally heated, and the houses that were more expensive weren't worth the extra money.

If we wanted to buy the same house, at end of last year prices, it would require us taking a mortgage of about £150,000.

from http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml this would be @ an optimistic 6%

£977.83 a month repayment mortgage

£750 interest only.

Even on a repayment mortgage for the first 5 or so years most of the money is paying off interest, so what is the point in spending at least £250 more (interest after all is as much money lost as rent) to risk going into negative equity, and to also have to pay for all the maintenance of the house?

None atall. I think you've made a wise choice. Later, when prices fall, you may have a rethink.... owning does have its benefits, too.

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So I'm just about to start to rent my first house...

We had been looking around to buy at the end of last year but financially we weren't ready, now we would be.

however we are just about to start renting a 3 bedroom house for just over £500 per month, this was about mid range in our 'comfy' budget, but its a nice house, centrally heated, and the houses that were more expensive weren't worth the extra money.

If we wanted to buy the same house, at end of last year prices, it would require us taking a mortgage of about £150,000.

from http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml this would be @ an optimistic 6%

£977.83 a month repayment mortgage

£750 interest only.

Even on a repayment mortgage for the first 5 or so years most of the money is paying off interest, so what is the point in spending at least £250 more (interest after all is as much money lost as rent) to risk going into negative equity, and to also have to pay for all the maintenance of the house?

My thoughts exactly and is one of the reasons why I am holding off buying.

People seem to forget that most of the payment in the first few years of a mortgage is Interest with very small capital reduction taking place. Doing your sums and saving could potentially reduce any future mortgage so I see it as you are paying off a potentially future mortgage quicker.

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