And so, the contracts were exchanged!

Published: 2025-09-24

Author: Arty

After various holdups, delays and waiting for the builders to get their ducks in a row, I finally exchanged contracts for my new house!

For those unaware, this is a significant milestone in the process of buying a house in the UK. It means that both parties (myself and the house builder) are now legally committed to the sale. I had to pay a deposit (10% of the purchase price) at this point, which is held by my solicitor until completion. Pulling out of said sale means fairly harsh financial penalties, so it’s not a decision to be taken lightly and basically means I need to keep my side clean in terms of the mortgage offer, ensuring the completion funds are ready and so on.

Unlike a previous house I attempted to buy, I feel far more comfortable and even optimistic about this purchase. The location is great, the price is fair and the house itself ticks almost all of my boxes and the best part is there’s no weird legal wrangling of the ownership or other shenanigans. At this point it’s waiting for completion and eventually looking at things such as flooring, furniture and so on.

Beyond that, work with my business continues to go very well. I’ve had some new clients come on board, as well as some existing ones grow their general operations which has meant the last month and a bit has been incredibly busy. I’m not complaining, it’s a good problem to have and I do enjoy the work I do. It has meant that my time for other things has been limited, but I think that’s a fair trade off for the time being. Considering the house purchase I’ve actually been relatively tax-inefficient as I’m trying to extract as much value to put towards the overall mortgage of the house.

My current plan regarding the mortgage (which is a 35 year term) is to overpay it by the maximum my mortgage allows me to across the 5 year period (20% of outstanding value). Now, in terms of growth and investments this is arguably not the most efficient use of my money, but I do like the idea of having a paid off house much, much sooner (early 40s at the latest!) and it means that my overall monthly payment is a hell of a lot lower. As a single earner for this household (as it’s just me) I do like the idea of having a lower monthly outgoings, especially in terms of risk and wider economic factors. At the end of the day, having a roof over your head is a pretty important thing to have (at least in a wet and rainy country).

In the first year I should be able to pay down £48,000 (and even better if it mis-aligns with the personal tax year) which will make a significant difference to the overall interest paid and actually shortens the term by a smidge over 10 years. Suddenly a 35 year mortgage has become 25 years (assuming I keep up the overpayments) which is a very nice bonus. Repeated year on year after five years I should be below £100,000 and outside of the mortgage fix duration which means I could remortgage if I wanted to, or just keep going with the same lender on the flexi rate.

Obviously life isn’t necessarily straightforward. Emergencies can and do happen, but due to the shrinking amount I can pay, by the time we’re in to year three the ‘excess’ I’ll be extracting from my business can count towards investments once again. Heck I might not even need to extract so much from the business so just by that virtue I’ll steadily become more tax efficient (and here’s hoping the tax bracket allowances improve in that time!).

The only frustrating thing about the whole house-buying and income process is my lawyers wouldn’t tell me how much was wanted as the deposit (I had a larger figure in mind) until a few days before exchange. This meant I’ve had a large amount of money sitting in my bank account earning interest, when the market has actually had some serious steady gains that I’ve missed out on! It’s not the end of the world but it is a bit frustrating.

You win some you lose some I guess.