Mortgage Rate Rises

[IvanDobskey]

£40k+...

Was only on £16k when I bought my first house though. That was a real struggle for a while.

Two bed semi, took me 17 years to pay off. Then sold to make the upgrade to the 4 bed detached. I had some savings along with the Mrs savings and a moderate mortgage which I've been chipping away at with overpayments.

 

[unwashed potato!]

I have a friend who could have bought 6-7 years ago, and he's been waiting for this to happen since.... don't think people realise that in big crashes, ability to obtain credit falls so the people who win are those who have access to cash...

Have they been paying rent for those 6/7 years? I hope not else they will be shocked if they add rent into the equation and see which is better. Buying 6 years ago or renting for 6 years and buying at a crash, if one comes, and if it comes with enough of a drop

 

[Jono8]

Have they been paying rent for those 6/7 years? I hope not else they will be shocked if they add rent into the equation and see which is better. Buying 6 years ago or renting for 6 years and buying at a crash, if one comes, and if it comes with enough of a drop

...and without a massive interest rate hike.

 

[Nutty667]

Me and the Mrs got a flat in 2017. We have both almost doubled our earnings since... Still not financially acceptable to "move up" and get a house.... even a modest terraced style house.

Increase in wage hasn't correlated with increased mortgage or property. Not that there is any rule that said it should.

Due to prices rising since and mortgage rates rising.

House prices apparently dipped this last 12month.... not really seen that, just a slower market. But property prices are due to increase next year....? Again, not sure why or how... all just made up magic.

Probablt said before, but covid skewed things here, prices went up sharp with still at the time low rates. Ever since it seems, people still want the high prices without accepting the new high rates. Everyone wants their cake really. That's just my own personal experience. We went through a phase of looking, bidding etc... but it was just obscene so we have given up for now.

Similar feeling here.
Bought this small, but with nice garden, 3 bed 10 years ago. Plan was always to move on to a bigger house at some point. Sold it twice around 2020, but couldn't find anything comparable with 4 bedrooms for not crazy money.
Now the chance of moving up seems completely impossible, even with decent pay rises between us both. I'd have to take on an extra 250K mortgage, which would massively jack up monthly costs. Luckily I'm on 0.9% for another 3 years yet.

With regards to consumerism, comments about parents lives being soo much different are true. I mean sure there were things to spend money on, but it's not like now where everyone needs internet, and feels they need at least 2 streaming services and a big tv.
Other than bills and mortgages, household services was just 1 landline at around £5 a month back then. I don't think people realise these days just how much older generations went without.

When I was growing up, my parents had their own business and a flat they rented out, but we didn't have anything flash. A tiny 14" portable TV, no sky, no VHS for many years, no internet, no foreign holidays. Money was put away for emergencies and the future.
It's a different mentality these days.

 

[ImMrChris]

Had my remortgage today holy ****, it went from 0.85% to 5.24% payments went up by nearly 50%! damn some people are really going to struggle....

 

[ivrytwr3]

My brother just can't keep a quid in his pocket. He's 46 now and nowhere near getting a foot on the ladder. Attitude is oh they'd never give me a mortgage anyway, haha. So he spends all his money on holidays. I doubt he's a one off. Lots of people have this attitude these days.

Just the amount needed for the deposit seems too much effort to acquire. Saving the money means going without the holidays, or whatever else is your thing.

Maybe he's got the right idea. He's got a place to live and enjoying life while he can.

Those of us who have taken on a mortgage have sacrificed certain things and when we hit old age, the Gov will just take our home to pay for care fees. Either way, nothing to pass onto the kids.

 

[Foghorn Leghorn]

I don't think people realise these days just how much older generations went without.

When I was growing up, my parents had their own business and a flat they rented out, but we didn't have anything flash. A tiny 14" portable TV, no sky, no VHS for many years, no internet, no foreign holidays. Money was put away for emergencies and the future.
It's a different mentality these days.

I can remember having those conversations with my kids when they were growing up.

No mobiles, no computers, no consoles, no internet, 3 television channels (I can remember the launch of channel 4) that stopped broadcasting at midnight. They looked at me like I'd just stepped off the ark.

I found out a few years later that they'd been and asked their mum if it was true as they thought I was having them on

 

[413x]

Maybe he's got the right idea. He's got a place to live and enjoying life while he can.

Those of us who have taken on a mortgage have sacrificed certain things and when we hit old age, the Gov will just take our home to pay for care fees. Either way, nothing to pass onto the kids.

At the end of the day if you have a choice maybe he is right. And the state will take care of him. While those with mortgages will have to fund it.

 

[fez]

Maybe he's got the right idea. He's got a place to live and enjoying life while he can.

Those of us who have taken on a mortgage have sacrificed certain things and when we hit old age, the Gov will just take our home to pay for care fees. Either way, nothing to pass onto the kids.

This is going to be a growing problem in my opinion. On the one hand you can spend every penny you get for nearly 50 years and the state will ultimately take care of you when you stop working. Or you can be financially prudent, go without and generally have a lower quality of life in many areas and see much of that hard work flow back to the government to ultimately pay for the first group.

I fully believe that generational wealth is a bad thing as money attracts money and all that happens is a smaller and smaller number of people end up owning everything but you have to reward people for being financially sensible or whats the point.

 

[Nutty667]

Had my remortgage today holy ****, it went from 0.85% to 5.24% payments went up by nearly 50%! damn some people are really going to struggle....

What's your LTV ? My 0.9% ends in 3 years. I'm hopeful rates might drop some by then.
Have you considered increasing term to reduce monthly costs ?

 

[M1k3H]

Have they been paying rent for those 6/7 years? I hope not else they will be shocked if they add rent into the equation and see which is better. Buying 6 years ago or renting for 6 years and buying at a crash, if one comes, and if it comes with enough of a drop

Yes. I know, but whenever you talk with him he's waiting for the crash....

 

[Nutty667]

At the end of the day if you have a choice maybe he is right. And the state will take care of him. While those with mortgages will have to fund it.

Does he have a good pension to cover rent in retirement though, or will be become homeless and need a council house or something?
That to me is the primary reason for having a mortgage to buy somewhere. Come retirement it's paid off and I can't be turfed out of my home.

 

[Foghorn Leghorn]

Maybe he's got the right idea. He's got a place to live and enjoying life while he can.

Those of us who have taken on a mortgage have sacrificed certain things and when we hit old age, the Gov will just take our home to pay for care fees. Either way, nothing to pass onto the kids.

Why should everyone else pay for your care fees, assuming you need any? If you have assets then they should be used to pay your way.

I really don't understand the attitude that the tax payer should pick up your care bill so you can pass on your wealth untouched.
We'll be mortgage free and have a small private pension on top of our state pension going into retirement, but if either of us end up needing significant care then the pensions and the house are there to help cover that. Whatever's left goes to our kids.

 

[IvanDobskey]

Why should everyone else pay for your care fees, assuming you need any? If you have assets then they should be used to pay your way.

I really don't understand the attitude that the tax payer should pick up your care bill so you can pass on your wealth untouched.
We'll be mortgage free and have a small private pension on top of our state pension going into retirement, but if either of us end up needing significant care then the pensions and the house are there to help cover that. Whatever's left goes to our kids.

On the other hand, why should people be able to live the high life without a care in the world, end up with nothing and then have all their needs paid for by the government?

 

[flea.rider]

Maybe he's got the right idea. He's got a place to live and enjoying life while he can.

Those of us who have taken on a mortgage have sacrificed certain things and when we hit old age, the Gov will just take our home to pay for care fees. Either way, nothing to pass onto the kids.

just sign it over to the kids before it all happens .. ? or put it into a trust ?

 

[413x]

Why should everyone else pay for your care fees, assuming you need any? If you have assets then they should be used to pay your way.

I really don't understand the attitude that the tax payer should pick up your care bill so you can pass on your wealth untouched.
We'll be mortgage free and have a small private pension on top of our state pension going into retirement, but if either of us end up needing significant care then the pensions and the house are there to help cover that. Whatever's left goes to our kids.

Its the catch isn't it.

If they are going to take everything and you'll end up like someone who blew it all... What is the point of saving?

Its like a means tested state pension . If it's means tested and you're just going to get over the threshold... Don't bother.

All of a sudden no one wants to work. And the burden gets too big and it all collapses.



This is what government has to avoid. People who have failed have can't be given a free ride to those who haven't level.. Otherwise there's no reward for working.

This isn't to say we need to live in a low tax regime where the poorest just die. But you have to reward people for success to some degree.

 

[ivrytwr3]

Why should everyone else pay for your care fees, assuming you need any? If you have assets then they should be used to pay your way.

I really don't understand the attitude that the tax payer should pick up your care bill so you can pass on your wealth untouched.
We'll be mortgage free and have a small private pension on top of our state pension going into retirement, but if either of us end up needing significant care then the pensions and the house are there to help cover that. Whatever's left goes to our kids.

Mmmmm, a bit to unpack there. I 'm not agreeing or disagreeing. The fact is, if you don't have the funds (your home) to pay for a care home, the Gov will pick up the tab anyway, so why not enjoy your £££'s and life? I didn't make the rules. Whether you understand it or not, dems da facts.

And on your last comment, that's the whole point, there won't be anything left of your assets if you have to fund your own care, where as the Gov will foot the bill for you and you could have given your kids your £££'s throughout your life.

 

[ivrytwr3]

just sign it over to the kids before it all happens .. ? or put it into a trust ?

Yeah there's rules to prevent just that.

 

[413x]

For myself.. Not having kids.. Its even more clouded.

If you have kids you can pass it down. If you don't.. You want to die with as little as possible.

Ill probably end up in the middle. And I'm questioning if there's any point saving/trying or just to go on crazy holidays now.
Exactly because I could end up same as someone who's had everything paid for forever.

My aim (and it will be achieved) is to be mortgage free. But I won't have a fab pension.
I'll likely rely on unlocking homes value to pay for stuff. But if paying is so expensive that I'm exhausted after 5 years and just end up on state, might as well just blow it all.



Its a genuine concern. And as child free grows it will become a point of contention

 

[Foghorn Leghorn]

On the other hand, why should people be able to live the high life without a care in the world, end up with nothing and then have all their needs paid for by the government?

Living the high life? Have you seen the level of basic care supplied by the government? Not what I'd be picking given a choice.

Of the people I know who've spent everything they've earned and have nothing to show for it, they're now hitting their 50's. Renting and general living is more expensive than it's ever been, yes they've had some flash holidays and cars but they're now starting to realise they're in the ****, they're working full time until they die. Personally I don't fancy working into my 70's maybe 80's or praying that I need to go into full time care just so I can stop working.