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  1. #1

    Anyone saving to buy a house for cash?

    I'm currently renting, no hurry to buy as prices are still falling here (NI). My rent hasn't risen in 5 years and isn't likely to, my LL is lovely, I like the house (though I would like a bigger kitchen).

    I have been reading the MFW diaries and, the more I think about it, the more I want to buy cash - or at least have as short a mortgage as possible. 5-10 years max. I just hate the thought of paying interest! My rent is less than the interest on my friends' mortgages - and those who bought during the boom are in HUGE negative equity.

    Plus, if you buy for cash, you have more freedom of choice, you're not beholden to a bank, you don't need to worry about interest rate rises - EVER. Imagine!

    To date, I have saved over 72,000 (expected to reach 75,000 by the end of the year), and I reckon that I can add at least 12,000 to that each year. So, in 5 years' time, I could have 135,000+ saved. That would buy me a pretty decent house here, but if I saw a really amazing house for a higher price, I could always borrow a small amount to top it up.

  2. #2
    Congrats on all your saving so far.

    Not exactly in the same position as have a 175000 mortgage myself, but looking to overpay and save as much as possible so on our next house (8yrs time) we can buy cash or as near to cash as possible.

    I live in a pretty expensive part of Surrey so prices in my area are rising at around 3-5% at the moment (in fact, they have risen throughout the 'credit crunch')

    Sounds like a very good idea, especially as NI financial climate seems like it is a better idea to hold off.

  3. #3
    Tara we are also in NI - I don't get the impression prices here are going anywhere fast. We've just bought last month and got a lot of house for the money. Wouldnt it be lovely to be mortgage free

    I guess the negative side is paying rent while you're trying to save - I would personally weigh up how much you're going to 'waste' on rent over the next 5 years vs 5 years interest on a smaller mortgage and see which wins. Pros and cons. While you rent your LL is responsible for things breaking etc too.

  4. #4
    I don't have any direct knowledge of the NI housing market, so take your word for it that in 5 years prices will remain same-ish. also have no idea about how much rental values are there.

    However, have you considered- well costed out the difference between buying now and taking on a smallish mortgage on interest only basis, whats the value of the monthly payments for the next 5 years versus how much rent you'll be paying over the next 5 years.

    Presumably you will continue to save at the same rate , and could pay off lump sums annually over the next 5 years also


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