what's SVR and how did you work out the repayment value of 750p.m??

Hi,

This was a real pain to work out I hope this is helpful???????????;0) 

130000 mortgage at fixed 5.59% for 2 years mortgage over 30 years, this illustration includes the period of SVR after the fixed rate ends.

Repayment 750p.m Balance after 5 years 121,080

I.O.            605p.m Balance after 5 years 130,000

Saving over 5 years on I.O.= 8,700  Balance paid off after 5 years on repayment = 9,020

Difference = 320     

I hope this gives you some idea how things could work for you either way, and whether you would benefit from the 145.00 saving each month??   

erm, not really.. can you break it down?

property value = £162,500

deposit = £32,500

30 yr mortgage

Hi,

Look at it this way. The amount you pay off the capital up to 5 years or so on a repayment is equivalent to what you save monthly on interest only. So instead of having a larger profit, you save almost the same amount by not paying the capital, is that clearer? 

Well the idea is to pay back the capital by selling the property.

Again -  a non commital up to you

Interest only is cheaper - but you have to pay the capital back somehow - that may be Inheritance, emmigrating, a sharesave scheme, 5 pound notes under the matress or downsizing in the future (if thats possible).

You could switch to repayment at a later date - advice would depend on your age, career progression etc etc.

Thanks for that!

Is it worth getting an interest only mortgage as I intend to keep the property for a few years and sell up or a repayment??

Up to you. They will lend you more because the monthly repayments will be lower over a longer term.

Seriously consider how much you can afford on a monthly basis and work the term on that. You can change the term in the future if your affordability incresses.

Oops, I meant mortgage :P

And whether interest only or repayment...

The banks will lend me more if I opt for a 30 year lease, is this wise??