£100k into £200k in 5 years ….
Discussion
I’ve got a 5 year plan to buy a house in Spain (due to wife being Spanish) which will be around £200k.
I’m good at saving money but naive at getting the best returns possibly.
I’ve currently got £102k saved towards it which is split with £50k in premium bonds, £35k in cash ISA , and rest sat in low interest online account.
I’m adding £1k a month and want to turn it into 200k or more in 5 years. Compound interest calculations seem to suggest that’s possible.
Looking for low risk but apart from maxing out my ISA what else can I do?
I’m good at saving money but naive at getting the best returns possibly.
I’ve currently got £102k saved towards it which is split with £50k in premium bonds, £35k in cash ISA , and rest sat in low interest online account.
I’m adding £1k a month and want to turn it into 200k or more in 5 years. Compound interest calculations seem to suggest that’s possible.
Looking for low risk but apart from maxing out my ISA what else can I do?
C69 said:
Is the £200k-ish house figure taking into account any property price inflation over the next five years?
What rates are you currently getting for your cash ISA and low-interest online account? Are these in fixed-term accounts or easy access?
Yes the 200k is a rough figure. There are houses I’d buy now which are 170k euros so my rough guess was to aim for 200k pounds as that should cover the house and all the fees. Spain doesn’t seem to go up as fast as the UK for houses. Especially new builds which is likely what I’m going for. What rates are you currently getting for your cash ISA and low-interest online account? Are these in fixed-term accounts or easy access?
My isa is currently at 3.95% which is due for renewal in April.
Low interest is literally like 0.1% or something tiny.
Both are easy access but my ISA is at its limit for the year now.
hstewie said:d8mok said:
My isa is currently at 3.95% which is due for renewal in April.
Low interest is literally like 0.1% or something tiny.
Both are easy access but my ISA is at its limit for the year now.
If you're going to keep the money in cash ISAs, then your first priority should be to maximise the rate that you're getting.Low interest is literally like 0.1% or something tiny.
Both are easy access but my ISA is at its limit for the year now.
I'd use a comparison site like Moneyfacts: https://moneyfactscompare.co.uk/isa/
At the moment, the variable-rate products offer better rates than any fixed ones, but obviously their rates can change. You might want to lock in a guaranteed rate for a set period, but you'd have to be sure that you wouldn't need the money for anything else.
Just as a left field point of view but would it be worth at least contemplating buying one now with a mortgage and a large deposit? ECB interest rates are still low.
Appreciated the Spanish property market can be a bit more risky than others but certainly the last 10 or so years it’s been steadily appreciating.
Just thinking in 5 years you may have saved £100k to reach your 200k goal to find the £200k property is £250k. Plus you could use the property immediately to enjoy (or rent it out to pay the mortgage).
Just a thought.
Appreciated the Spanish property market can be a bit more risky than others but certainly the last 10 or so years it’s been steadily appreciating.
Just thinking in 5 years you may have saved £100k to reach your 200k goal to find the £200k property is £250k. Plus you could use the property immediately to enjoy (or rent it out to pay the mortgage).
Just a thought.
Shnozz said:
Just as a left field point of view but would it be worth at least contemplating buying one now with a mortgage and a large deposit? ECB interest rates are still low.
Appreciated the Spanish property market can be a bit more risky than others but certainly the last 10 or so years it’s been steadily appreciating.
Just thinking in 5 years you may have saved £100k to reach your 200k goal to find the £200k property is £250k. Plus you could use the property immediately to enjoy (or rent it out to pay the mortgage).
Just a thought.
Totally agree with this too. My issue is from speaking to a couple of people that it would be very hard to obtain a Spanish mortgage.Appreciated the Spanish property market can be a bit more risky than others but certainly the last 10 or so years it’s been steadily appreciating.
Just thinking in 5 years you may have saved £100k to reach your 200k goal to find the £200k property is £250k. Plus you could use the property immediately to enjoy (or rent it out to pay the mortgage).
Just a thought.
My understanding is that they won’t take dividends into account when looking at income too which leaves me earning very little.
There is also the possibility that when the 5 year point arrives that we may also sell our UK home and move there completely. But I’m not sure I have the balls for this yet.
Our Uk home is paid for , I’m 40 and I have no other debt. My wife is a few years younger and in the same position. She has about £50k saved but this was ear marked for moving costs when we do actually go full time. Both earning ok money and have 1 child. If anyone can offer any guidance with who would look at a Spanish mortgage?
I would repeat the suggestion to buy today with a mortgage given that you may or may not have to pay some or all of the 100% property tax proposed by the president in 5 years.
https://www.bbc.co.uk/news/articles/cr7enzjrymxo
Whilst it probably won't make it through to legislation it's another headache and buying in five years leaves you exposed to inflation risk (UK vs Spain) and risk that EURGBP moves against you.
https://www.bbc.co.uk/news/articles/cr7enzjrymxo
Whilst it probably won't make it through to legislation it's another headache and buying in five years leaves you exposed to inflation risk (UK vs Spain) and risk that EURGBP moves against you.
My reading is that 100% tax scare story/click bait is misleading at best.
My understanding is that non-EU residents may be required to pay 100% of their equivalent of council tax, not the discounted rate currently enjoyed. So it's not 100% of the purchase price which is what is being implied, it's the removal of discounts. This varies by region and is decided by the local authorities.
I've been wrong before though...
My understanding is that non-EU residents may be required to pay 100% of their equivalent of council tax, not the discounted rate currently enjoyed. So it's not 100% of the purchase price which is what is being implied, it's the removal of discounts. This varies by region and is decided by the local authorities.
I've been wrong before though...
d8mok said:
Totally agree with this too. My issue is from speaking to a couple of people that it would be very hard to obtain a Spanish mortgage.
My understanding is that they won’t take dividends into account when looking at income too which leaves me earning very little.
There is also the possibility that when the 5 year point arrives that we may also sell our UK home and move there completely. But I’m not sure I have the balls for this yet.
Our Uk home is paid for , I’m 40 and I have no other debt. My wife is a few years younger and in the same position. She has about £50k saved but this was ear marked for moving costs when we do actually go full time. Both earning ok money and have 1 child. If anyone can offer any guidance with who would look at a Spanish mortgage?
I'm in a similar position (low salary, decent dividends) and european mortgages are unavailable to us I am afraid, post Brexit.My understanding is that they won’t take dividends into account when looking at income too which leaves me earning very little.
There is also the possibility that when the 5 year point arrives that we may also sell our UK home and move there completely. But I’m not sure I have the balls for this yet.
Our Uk home is paid for , I’m 40 and I have no other debt. My wife is a few years younger and in the same position. She has about £50k saved but this was ear marked for moving costs when we do actually go full time. Both earning ok money and have 1 child. If anyone can offer any guidance with who would look at a Spanish mortgage?
In your position I'd remortgage your UK home to raise the £100k you need and look to rent it out when you aren't using it. I only know the French market but in France there are VAT savings on new build properties which you rent out for X number of years. Might be worth looking in to also?
LordGrover said:
My reading is that 100% tax scare story/click bait is misleading at best.
My understanding is that non-EU residents may be required to pay 100% of their equivalent of council tax, not the discounted rate currently enjoyed. So it's not 100% of the purchase price which is what is being implied, it's the removal of discounts. This varies by region and is decided by the local authorities.
I've been wrong before though...
Correct. The amount of folks who have completely misinterpreted the news (not helped by the press) is beyond belief. My understanding is that non-EU residents may be required to pay 100% of their equivalent of council tax, not the discounted rate currently enjoyed. So it's not 100% of the purchase price which is what is being implied, it's the removal of discounts. This varies by region and is decided by the local authorities.
I've been wrong before though...
Most seem to think it means you pay the same price as you paid for the property in tax! It’s nonsense
https://www.justlawsolicitors.com/consumer-rights/...
And even then, this was only among 11 other proposals! Idea stage only.
To be honest the whole Spanish system is a mystery to me and scares me because of that reason. So much misinformation is out there.
I’m not well enough to buy a property unless it stacks up for what I can afford monthly but also without compromising Uk life. The Spanish do seem to like to change things often which could impact me massively.
My daughter is 2.5 years old now and I really want her to have a close relationship with Spain as ultimately we would like to live there. Visiting family is fine but I think we would all enjoy it more if we had our own space. Plus I’d love to keep a pushbike there for when I get away.
I’m not well enough to buy a property unless it stacks up for what I can afford monthly but also without compromising Uk life. The Spanish do seem to like to change things often which could impact me massively.
My daughter is 2.5 years old now and I really want her to have a close relationship with Spain as ultimately we would like to live there. Visiting family is fine but I think we would all enjoy it more if we had our own space. Plus I’d love to keep a pushbike there for when I get away.
d8mok said:
To be honest the whole Spanish system is a mystery to me and scares me because of that reason. So much misinformation is out there.
I’m not well enough to buy a property unless it stacks up for what I can afford monthly but also without compromising Uk life. The Spanish do seem to like to change things often which could impact me massively.
My daughter is 2.5 years old now and I really want her to have a close relationship with Spain as ultimately we would like to live there. Visiting family is fine but I think we would all enjoy it more if we had our own space. Plus I’d love to keep a pushbike there for when I get away.
It's not too bad, especially if you have a Spanish wife to navigate. I must admit I avoided new builds for a variety of reasons, not least wanting a tangible product there in front of me with no chance of a dodgy developer taking my money and not giving me what I had paid for. I’m not well enough to buy a property unless it stacks up for what I can afford monthly but also without compromising Uk life. The Spanish do seem to like to change things often which could impact me massively.
My daughter is 2.5 years old now and I really want her to have a close relationship with Spain as ultimately we would like to live there. Visiting family is fine but I think we would all enjoy it more if we had our own space. Plus I’d love to keep a pushbike there for when I get away.
Good luck in your quest, regardless. I bought a house there when I was 40 and one of the best things I have done. Sure, I could have bought bitcoin etc but this was an investment that I could spend a lot of time in as well as see a return. Zero regrets.
One thing that is interesting is the dual way "bet" when adding fx fluctuations to house price "gambles". Buying in the UK you are speculating on the housing market. Buying in € you are speculating against house prices and currency. If I wanted to repatriate the money for any reason, a 25% house price rise can be levelled by a 25% rise in the £ versus the €. That's one thing, but if they both go against you....not so much of an issue if you want to either retain the property or indeed the currency.
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