Soldato
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You'll win some and you'll lose some over the life of your mortgage. I've been 'lucky' this time around but not so much in the past. Like you said it'll even out over time.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
You'll win some and you'll lose some over the life of your mortgage. I've been 'lucky' this time around but not so much in the past. Like you said it'll even out over time.
Soldato
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Hopefully win some lose some
Its certainly possible to lose them all, or all the significant ones.
If you have a 25 year mortgage the first 2-3 5 year fixes are the ones that really matter.
Soldato
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True, the cost of getting it wrong in the early years is far greater.
Its hefty. Even small movements in the rate have a big impact on your life
Another 10 year fixer here. We did it in 2019 @ 2.49%, rates were starting to rise pre-pandemic, economy seemed to be gathering a bit of pace. Rates were likely to go in one direction only. All the extra QE that had happened since the brexit vote was only going to send rates one way.
Then the pandemic hit and they went down!
There is also a lot more flexibility than most people realise. We moved house 6 months after fixing for 10 years and doubled the mortgage. The new borrowing was at a slightly higher rate but fixed for 10 too, the original borrowing was kept as it is.
Obviously the bank said when we fixed for 10 years there wasn’t a guarantee they would lend on extra borrowing if we ported, you obviously have to meet their criteria. In reality, we are both employed and we’ll within our borrowing capacity, it was never going to be a problem.
Then the pandemic hit and they went down!
There is also a lot more flexibility than most people realise. We moved house 6 months after fixing for 10 years and doubled the mortgage. The new borrowing was at a slightly higher rate but fixed for 10 too, the original borrowing was kept as it is.
Obviously the bank said when we fixed for 10 years there wasn’t a guarantee they would lend on extra borrowing if we ported, you obviously have to meet their criteria. In reality, we are both employed and we’ll within our borrowing capacity, it was never going to be a problem.
Yet another 10 year fixer here, but my FTB purchase was post-pandemic (04/22) - by then I could only see interest rates climbing
I was using an advisor solely for convenience purposes (ie they handle all the paperwork) and just told them which mortgage I wanted...which was 2.35% x 10 years with 50% LTV
Was brought up to be frugal with money, so I have worked on a 50-30-20 rule since starting work but with a twist where it's 50% savings, then 30% essentials and as little of the 20% to spend
I was using an advisor solely for convenience purposes (ie they handle all the paperwork) and just told them which mortgage I wanted...which was 2.35% x 10 years with 50% LTV
Was brought up to be frugal with money, so I have worked on a 50-30-20 rule since starting work but with a twist where it's 50% savings, then 30% essentials and as little of the 20% to spend
Some people only care about the moment and don't care about having money in old age. Seems kinda crazy but I also appreciate that you aren't exactly going to much exciting with a 40k a year income when you're 70. Though that's a kinda dumb way to look at things.
I wish Id been savvy enough to invest when younger but I've recently changed jobs and now financial planning is on my radar
Best not to have any money saved in old age they only take it off you
Caporegime
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The only education you can have is how to build a time machine and go back and buy houses when they were cheap.
It doesn't matter how smart you are with your money when the house to wage ratio has gone up magnitudes in the past 20 years.
If its all in savings and isas etc then I guess you avoid some taxation but you're probably not wrong
Soldato
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The thing is that if everyone saved and thought about the future the whole economy would be smaller, and many jobs wouldn't exist.
Also you can't really blame people for not saving when they don't have much in the first place. A new phone, going to the pub, those are the highlights of many people's lives who have little to start with.
The real issue with financial illiteracy is that come retirement most will have no idea what pension they have and it will be tiny.
The system from a personal finance point of view is for the majority completely broken. Ridiculously high rents, housing costs in general, taxation, utility bills, food, childcare, to name but a few things.
Life is for living but the government and financial system have colluded to drain as much as they can from the average law abiding citizen.
The system from a personal finance point of view is for the majority completely broken. Ridiculously high rents, housing costs in general, taxation, utility bills, food, childcare, to name but a few things.
Life is for living but the government and financial system have colluded to drain as much as they can from the average law abiding citizen.
Of course being smart with money always helps.
But anyway I was referring more to the decision making and poor advice folks were getting from brokers previously.
Soldato
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That's the big con isn't it. Life isn't really for living. Up until only a few hundred years ago people mostly just existed to breed and work. We've all been led to believe things should be better, and things have got better for many, but then when the brown stuff hits the fan it's straight back to just existing again.
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I don’t disagree but here’s the rub, all the information is out there. It’s not rocket science. Internet age and all that. They teach compound interest in schools.
The reality is people don’t want to know or don’t seem it important until it’s too late.
Mother-in-law had vascular dementia so had to have cares in until she went into a care home so the her savings were used and the house was sold to pay for them. She died before the majority of the house money had gone.
That’s progress for you
I agree people should take more responsibiliy and it's ultimately on them. But better education would for sure help.
If they're smart they'd just stop being poor and get a mid 6 figure job and a financial planner to tell them what to do with the after living excess imo. That way you don't need to worry about the measly state pension you work your whole life paying at an ever increasingly higher age. Educate these low iq commoners now and don't get me started on frothy coffees.