Puts your monthly repayments down though if on a repayment mortgage (as apposed to interest only).
And yes the lender I work for are now offering 40 year terms an 99 years old max age.
Mortgage Rate Rises
- Thread starter glenimp617
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Puts your monthly repayments down though if on a repayment mortgage (as apposed to interest only).
And yes the lender I work for are now offering 40 year terms an 99 years old max age.
Vaguely nauseating
Soldato
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No thats not what I said at all
FWIW I have had a 10 and a 15 year fix in my lifetime.
It very much IS within an individuals option to reduce their rate risk.
For every 20 people who have asked me my advice (they tend to as accountant) I would say 19 have gone with a short term fix, even though IMO they would have been better suited for a longer one.
Its worth considering that 15 years on a 25 year term is around half the capital repaid. It takes a long time to get to that point.
People almost always shy away from longer fixes due to higher rates.
Even now, with longer fixes generally cheaper than shorter ones people still go "I expect rates to drop"
Mind if you can let us know the breakdown as thats a significant achievement.
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Soldato
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Agree but right here and now that option doesn't exist in the UK.
Soldato
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People seem to think low rates are the norm, they've really been an anomaly. Years ago when I worked in the area we were offering fixed rates of 6.something percent or thereabouts.
They were getting snapped up. I have always done fixed rates, you can decide what you feel is acceptable then budget for it and not worry about rate changes.
I find it hard to have sympathy for many who stretched themselves financially on very low variable rates. They're variable. This is the risk.
Others have hit them by misfortune timing wise due to their fixed rate ending, I do have sympathy with them.
Vaguely nauseating
Yea I know.
Bit I don't think the 40 year term is bad.
Yes if you stay on that same mortgage for 40 years it'll cost you an absolute fortune sure.
Realistically people won't, and you can always make overpayment or remortgage to a shorter term later.
In the short term it will reduce your monthly payment so can relieve a bit of pressure.
Yeah, there's nothing to say you can't change term when you renew.
Mortgage £302 (saved a heavy deposit, moved in February and will be mortgage free in around 8 years with overpayments of 10% each January) just a small 2 bed semi, fine for my needs
Council tax £92
Water £14
Electric and gas £40-50 (octopus tracker) my standing charges are half my bill.
Boiler insurance £20
Internet £27 (got £180 in cashback though...)
Food around £80
Petrol about £40 per month if that
Phone sim currently 1p as its jump between lebera and lyca on we whatever offer they have for 6 months (and get cashback to do it)
Building and contents £10 a month but paid annually
Car insurance £50 but pay annually and will get refund of around £200 at the end as I'm on By miles as I don't drive much
Car tax £15 but pay annually
For my car I bought it outright so no monthly payments
Come out with roughly £1500 per month after taxes. With bonuses on top of £50-500 depending on performance but never gaurenteed
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I havent followed most of your comments but I assume you took a 10 year fix right?
Soldato
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I have a foot in both camps here.
There are certainly some who will have maxed themselves when they didnt need to. They had super cheap rates and high prices.*
There will be others who could only just afford to buy what they needed (I mean genuinely needed) and who also had super cheap rates and high prices.
The first group I have little sympathy for. The second a lot.
The main issue is like I said earlier, if everyone is suddenly better off then the prices will reflect that. It won't suddenly mean everyone can afford a mansion.
Because the mansions will soar in price.
And this follows through to house prices, the very long sustained ultra low rates have fed into house prices, because everyone could "afford" more. So the prices moved to reflect the sorting of people borrowing potential to the houses they "should" have bought.
The vast majority wouldn't be in a significantly different house to as if rates had remained at 5% and prices were 30% lower.
Is that just for you?
Just me yeah I live alone. I have a cat who is my world if that counts haha
This just shows if you live una cheaper house/area you can take the pressure off.
One thing I do accept is that people do. Seem to want too much from a home. It doesn't need to be so big.
Not always.. But it's an aspiration of most.
I'd like a bit bigger house. But I don't beg it.
I'd like to live somewhere more rural but I don't need it
80 a month.. That's impressive for food. 8d spend significantly more if it was just me.. But I'm not the most efficient with food.
Our gas and electricity is significantly high even if we (probably) are on a much better rate than you.
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I'm in north east so prices are lower than many places. House is a 2017 build semi cost £113k put down a £75k deposit in February this year (my savings no help, I'm 32)
Yeah it's small one of those 600-700 square feet ones. But it's still pretty empty as I don't put much value on "things", plenty of space and easy to keep tidy/clean. Apart from all the cat toys all over the place
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Shouldn't they? Thats quite literally what the rates are suggesting or am I missing your point here.
If long term rates are more expensive that short term they think that rates will rise and if its the opposite they expect rates to drop.
Its all a gamble but most people for the past 10-15 years have been well rewarded for taking short term mortgages. When you think back, it was stupid. We were the same. "Well, the 10 year fixed rate is 2.24% and 5 year fix is only 1.94% so we will go for the 5". And if we had been "lucky" and bought our house a few years earlier we would have won out and got at new rate of probably 1.5% ish. Instead we are up for renewal at the end of the year and will be looking at 6% or more.
I'm in north east so prices are lower than many places. House is a 2017 build semi cost £113k put down a £75k deposit in February this year (my savings no help, I'm 32)
Yeah it's small one of those 600-700 square feet ones. But it's still pretty empty as I don't put much value on "things", plenty of space and easy to keep tidy/clean. Apart from all the cat toys all over the place
Apart from lego and host plants I also try not to aquire "things'.
My parents and grandparents have/had loads of ****.
My mums always saying "do you want this?"
No.. Its tat and I don't want more clutter to get on the way of cleaning.
75k of savings... Impressive!
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Soldato
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Its a little more complicated when your talking longer term borrowing in order to lend.
Ask any long term saver if they would be willing to lock in 4%+ for 10 years and based on the last 10-15 year what do you think they would say?
If the general level of expectation is for a longer term lowering of rates then you would expect longer term borrowing to be at a lower rate.
Really its a guessing game from all parties.
The point remains, even if the longer term fix is lower, the fact people are still saying I will take a shorter fix at a higher rate on the guess they will be lower later means they are STILL prioritising payment amount over security.
5 years is still a short term fix for most in reality. Its probably medium if your term is 10 years or so left.