My partner and I are currently trying to work out exactly what mortgage would be best on a FTB house purchase and would like some community advice.
(We are also in talks with a mortgage advisor, however we value broad opinions as well so not solely looking for advice on reddit.)
Essentially my partner and I have been looking into available mortgages and were originally set on a 2 or 5 year fixed rate because we were under the assumption it is just the done thing, a majority of the people we interact with are on them so why shouldnt we?
Fast forward to now and a fair bit of research later and we cant help but feel that a lifetime tracker may suit us better.
We dont feel like the 1520-1799 monthly mortgage will strech us too far as we have been able to utilise 4000 a month on our current rent and deposit savings for the last 2 years with the further 2050-3000 a month going on all other housing expenses i.e council tax, bills, life costs, holiday and family/friend events, single child etc.
This leads us to think that maybe the lifetime tracker would work for us as a fluctuation of up to 2000 a month would still only land us into around 28.5-33% of our income, and still be half of what we have been saving/spending for 2 years just to get this property.
Do any of you have any experience in this area or have any words of wisdom for us given the information given here?
TIA!
Relevant details:
- 0 debt, will only be this morgage
- Loan value is 355,000
- Monthly income after tax 6,050~7000 depending on baseline wage vs good month
- Both of our jobs are very stable and have yearly pay increases ~ 2.5-3%
- Mortgage rates below will account for around 22-30% of our take home
- HSBC 2 yrs fixed at 5.02 coming out at 1,799 (26-30% TH)
- HSBC 5 yrs fixed at 4.89 coming out at 1769 (25-29% TH)
- First Direct Lifetime tracker currently at 4.65 coming out at 1,716 monthly (23%-27% TH)