Mortgage Rate Rises

Hagar said:
Presumably they were members of said bank for some time and in good standing with it. Most mortgages came from building societies and with the same provisos as above. Loans were not handed out willy nilly there had to be understandings and money was tight. Banks would readily bounce cheques and credit cards were in their infancy. I am not decrying the house buyers of today, it has always been tough and not so simple as you are making out. We also had high income taxes and little welfare state to contend with
My own property about that time had one powerpoint upstairs, no damp course and required extensive and expensive renewals and renovations, an 1890's working man's cottage. It is now quite a nice terraced house last on the market at £180k i believe. A very old friend still lives in that street.
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Their words, not mine. That's a nice story about a cottage.

It's become harder and harder to buy a house as the years have gone by. Let's all hold hands and sing kumbaya.
 
Hagar said:
Presumably they were members of said bank for some time and in good standing with it. Most mortgages came from building societies and with the same provisos as above. Loans were not handed out willy nilly there had to be understandings and money was tight. Banks would readily bounce cheques and credit cards were in their infancy. I am not decrying the house buyers of today, it has always been tough and not so simple as you are making out. We also had high income taxes and little welfare state to contend with
My own property about that time had one powerpoint upstairs, no damp course and required extensive and expensive renewals and renovations, an 1890's working man's cottage. It is now quite a nice terraced house last on the market at £180k i believe. A very old friend still lives in that street.
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Not so sure about "little welfare state to contend with".

Potentially you talking back in the days before the impact of Right to Buy kicked in (and there was less immigration Reform fans!) when there was a lot more council housing available. Also, I've been told it used to be much easier to claim benefits such as the dole if you were temporarily unemployed.
 
aaronyuri said:
Their words, not mine. That's a nice story about a cottage.

It's become harder and harder to buy a house as the years have gone by. Let's all hold hands and sing kumbaya.
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I was wrong about the sale price, the most recent sale in that street for a very similar house was £125k


It backed onto a BICC cable works since demolished for housing. I really did like that house though.
 
tonys said:
We had only variable 25yr or under terms. Today you have fixed and 25yrs plus terms.
We had to pay any increase the following month, with fixed rates it's deferred until renewal.
The criteria for help was changed due to the repossessions in the 90's. Before that you had to pay the mortgage regardless of other commitments(food or utilities this is from personal experience from the high interest times.)
There are other differences but I'm too slow at typing.
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Out of interest are you talking about repayment mortgages or the (I think no longer available) endowment mortgages? They were designed to keep monthly costs down in times of high interest, but as I recall people with endowment mortgages were always complaining. When interest rates were high they complained about the monthly payments. When interest rates were low they complained that their endowment wasn't growing enough.
 
Hagar said:
I was wrong about the sale price, the most recent sale in that street for a very similar house was £125k


It backed onto a BICC cable works since demolished for housing. I really did like that house though.
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My parents house was a 1910 miners terrace with an outside toilet. I say toilet, I mean a wooden hut surrounding a hole in the ground. Your upstairs power outlet must've been a real luxury.
 
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Mr Badger said:
Out of interest are you talking about repayment mortgages or the (I think no longer available) endowment mortgages? They were designed to keep monthly costs down in times of high interest, but as I recall people with endowment mortgages were always complaining. When interest rates were high they complained about the monthly payments. When interest rates were low they complained that their endowment wasn't growing enough.
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We cashed in two out of three endowments as they were never going to make the required payback. Yes this was after 2000 when the bank rate sunk to 4.5% and we just had a repayment mortgage after. With an endowment it was slightly cheaper as the mortgage paid the loan interest and the principal was supposedly secured by the additional endowment premium. So the payment each month still yoyo'd with the bankrate. We did lose a few grand on cashing in, the only one to break even was supposedly with profits taken out in 1982.
 
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Mr Badger said:
Out of interest are you talking about repayment mortgages or the (I think no longer available) endowment mortgages? They were designed to keep monthly costs down in times of high interest, but as I recall people with endowment mortgages were always complaining. When interest rates were high they complained about the monthly payments. When interest rates were low they complained that their endowment wasn't growing enough.
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Initially it was a repayment only, then we took out an endowment (easy, just sign on the dotted line) this was the worst decision for us as it grew very slowly and only managed to produce 17k instead of 36k, remortgaged again repayment only. So after 44yrs I'm still paying a mortgage.:(
 
Mr Badger said:
Out of interest are you talking about repayment mortgages or the (I think no longer available) endowment mortgages? They were designed to keep monthly costs down in times of high interest, but as I recall people with endowment mortgages were always complaining. When interest rates were high they complained about the monthly payments. When interest rates were low they complained that their endowment wasn't growing enough.
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Endowments were a great in theory product, but the problem is they collided with a public who are in general useless in these sorts of things.
What you describe is to be expected.

Interest rates are high in general when inflation is high and growth is high(ish)
Interest rates are low in general when inflation is low and growth is low(ish)
This does vary but as a general trend and with an endowment you always had in effect two generally mutually exclusive positions you wanted to happen (high returns and low interest rates)
 
Hagar said:
Even in the eighties I could never have afforded a house in Hampshire. My father did moving to Petersfield in 1965 from working abroad. I moved to St. Helens in '74 then Leigh in Lancashire eventually buying a terraced house in 1982.
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From Hampshire to Leigh. That must have been quite a shock :cry:
 
200sols said:
Mortgages being used like this e.g longer terms etc is not an argument in your favour it's a symptom of house prices rising much faster than wages.

It's just a fact its much harder today for young people to bug a house. The fact older people push back on that for some reason is very telling in itself.

Older people think they had it hard, many can't seem to accept its even harder today.
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I was chatting to my brother about this over the weekend, we're early and mid-40s, and agree that our generation (X / Xillenial) are probably the first that DON'T think the kids of today have it easier than we did.

From social media, job prospects with AI, climate change, and housing affordability, we feel super bad for under-20s currently out there. :(
 
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krooton said:
I was chatting to my brother about this over the weekend, we're early and mid-40s, and agree that our generation (X / Xillenial) are probably the first that DON'T think the kids of today have it easier than we did.

From social media, job prospects with AI, climate change, and housing affordability, we feel super bad for under-20s currently out there. :(
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My partner and I have come to the same conclusion - We've already started saving to get our kids on the ladder. Unless they happen to be very lucky and/bright they're going to struggle to buy anywhere nice by the time they'll be ready.
 
BongoHunter said:
My partner and I have come to the same conclusion - We've already started saving to get our kids on the ladder. Unless they happen to be very lucky and/bright they're going to struggle to buy anywhere nice by the time they'll be ready.
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But isn't it better to use those savings to over pay your mortgage now, and then with the interest saved from over paying, give that to them then, or remortgage to get it back but hopefully at a lower rate?
 
unwashed potato! said:
But isn't it better to use those savings to over pay your mortgage now, and then with the interest saved from over paying, give that to them then, or remortgage to get it back but hopefully at a lower rate?
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There's a limit to what we can overpay the mortgage by, and we get better returns on the investments we're making.

Our mortgage is currently at 3.99% fixed until 2028 - but yeah it would be better to clear our own mortgage first if investments got a lower return.
 
unwashed potato! said:
But isn't it better to use those savings to over pay your mortgage now, and then with the interest saved from over paying, give that to them then, or remortgage to get it back but hopefully at a lower rate?
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This is one of those "it depends" answers. There are multiple facets to consider:

What is the return rate of savings?
What is the interest saved on the mortgage?
How much faster would you pay off your mortgage?
Savings can be repurposed for emergencies. Releasing equity from the property is more challenging and takes more time. Which would you be more comfortable with?

One needs to answer all of these questions and then that can only be decided by oneself. Some are more risk adverse than others, some people are frugal and compulsively pile money like they won't die one day. It really depends on the market, your circumstances, and your preferences.
 
BongoHunter said:
My partner and I have come to the same conclusion - We've already started saving to get our kids on the ladder. Unless they happen to be very lucky and/bright they're going to struggle to buy anywhere nice by the time they'll be ready.
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My daughter puts money away for her 2 children and we put some by for them aswell. Despite what people think some older people do realise the difficulties faced by the young.
 
Richie said:
80s - average house price was 4x average salary
2022 - average house price is 8x average salary
Source
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Is this not an almost exact correlation to the fact that in the 1980s, most households had only one income, and now most have two, as it's no longer taboo for women to work? Pretty much basic supply and demand, household incomes "double", house prices double (relatively).

Great for the women who want to work. Not ideal for those who want to raise a family in a more traditional manner now it has flipped from those who want to can to everyone has to.
 
rG-tom said:
Is this not an almost exact correlation to the fact that in the 1980s, most households had only one income, and now most have two, as it's no longer taboo for women to work? Pretty much basic supply and demand, household incomes "double", house prices double (relatively).

Great for the women who want to work. Not ideal for those who want to raise a family in a more traditional manner now it has flipped from those who want to can to everyone has to.
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I don't think double the people working = double the salary, but I think the point you make is valuable.
 
rG-tom said:
Is this not an almost exact correlation to the fact that in the 1980s, most households had only one income, and now most have two, as it's no longer taboo for women to work? Pretty much basic supply and demand, household incomes "double", house prices double (relatively).
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Goes against the gender pay gap narrative though doesn't it? ;) If it exists, women are earning less than men ergo the household income doesn't double (I realise you used quotes around it)
 
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