Mortgage Rate Rises

Screeeech said:
The thing I find interesting, is that right now I'm renting a nice place in Berkshire; Barn conversion with a double garage/parking, large garden, 2 bedrooms and plenty of space, for £1550 in a very very nice area.

I'm from Lincoln originally, the average price of a decent 3 bed semi with a garden, garage and stuff is around £300k.

Right now if I want a mortgage with a 10% deposit on a house in Lincoln for £300k, it's going to come in around £1800 a month*, that means in Lincoln - you'd need to have a household income of around £120k, in order for the mortgage payment to be around 30% of takehome salary, there aren't many people earning £120k in Lincoln.....

It just seems nuts to me, that it's cheaper for me to rent in Berkshire, than it is to own an average house in Lincoln. Then there's the question of how many people up there are going to be able to afford £1800 a month on a mortgage, I know people renting in London who are paying less...**

* Before this all kicked off, the same mortgage on the same property would have been around £1050-1100 a month.
**I imagine rents will also rise,
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Right now a mortgage of £270k at 5.49% for 5yr fixed is £1391 if you spread it over 40yr which you will see people have to do to achieve such a property purchase. If you had rates from 2021 even at say 1.63% such as what I am on hen it would only be £766 for the same length of time! However to get to your £1800 price you'd only be mortgaging for 20yrs.
 
Curlyriff said:
Right now a mortgage of £270k at 5.49% for 5yr fixed is £1391 if you spread it over 40yr which you will see people have to do to achieve such a property purchase. If you had rates from 2021 even at say 1.63% such as what I am on hen it would only be £766 for the same length of time! However to get to your £1800 price you'd only be mortgaging for 20yrs.
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Not really related to that point but how common are 40 year terms, sounds kinda nasty considering the average FTB is mid-30's now aren't they?

I got my first house at 31 with a 30 year term, after 5 year fixed I dropped the term to 20 years remaining (so 25 years total effectively), that was bad enough thinking I'd have a mortgage into my 60's, just, can't imagine the thought of having a mortgage into my 70's...
 
SKILL said:
Not really related to that point but how common are 40 year terms, sounds kinda nasty considering the average FTB is mid-30's now aren't they?

I got my first house at 31 with a 30 year term, after 5 year fixed I dropped the term to 20 years remaining (so 25 years total effectively), that was bad enough thinking I'd have a mortgage into my 60's, just, can't imagine the thought of having a mortgage into my 70's...
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All major lenders are starting more and more to offer them. I brought at 19 first time with a 35yr and then when moved at 25 had another 35yr term, I now have 27yr left on that but that because I got to keep a super cheap rate for another 5yr at the 1.63% by doing that without a load of hassle.

I will likely see if I can keep a longer term again come then though and then invest into other savings if it makes sense and the mortgage rate is low enough to pay a larger lump sum off when I hit 60 or similar and clear it in one go.

But going back to your question, Halifax, Nationwide, Leeds Building & Yorkshire Building, Santanderm Barclays deffo do 40yr.
 
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TheOracle said:
as a home owner myself, house prices need to come down. The gap between wages and houses is far too big.
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Absolutely
But with the current interest rates the affordability cost wise isn't going to be lower than it was, it just means the bank make more.

At current interest rates with a 20% drop on my house, it costs more per month than our current fix.
 
SKILL said:
Not really related to that point but how common are 40 year terms, sounds kinda nasty considering the average FTB is mid-30's now aren't they?

I got my first house at 31 with a 30 year term, after 5 year fixed I dropped the term to 20 years remaining (so 25 years total effectively), that was bad enough thinking I'd have a mortgage into my 60's, just, can't imagine the thought of having a mortgage into my 70's...
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Is that something you can do without cost? I just got my first mortgage over 25yr on a 5yr fix at 2%, offer was about 6/7 months ago hence the rate.

I can overpay by 10% but not worth it at my current rate, I can earn more on cash haha.

So after my 5 years could I theoretically reduce the remaining 20yr to 15 yr without any fees and just pay more per month? I've asked people about this but never got an answer (I've only asked friends to be fair).
 
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seanyc5 said:
Is that something you can do without cost? I just got my first mortgage over 25yr on a 5yr fix at 2%, offer was about 6/7 months ago hence the rate.

I can overpay by 10% but not worth it at my current rate, I can earn more on cash haha.

So after my 5 years could I theoretically reduce the remaining 20yr to 15 yr without any fees and just pay more per month? I've asked people about this but never got an answer (I've only asked friends to be fair).
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when you remortgage you can ask for the term to be whatever you want
 
seanyc5 said:
Is that something you can do without cost? I just got my first mortgage over 25yr on a 5yr fix at 2%, offer was about 6/7 months ago hence the rate.

I can overpay by 10% but not worth it at my current rate, I can earn more on cash haha.

So after my 5 years could I theoretically reduce the remaining 20yr to 15 yr without any fees and just pay more per month? I've asked people about this but never got an answer (I've only asked friends to be fair).
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Yes
 
seanyc5 said:
Is that something you can do without cost? I just got my first mortgage over 25yr on a 5yr fix at 2%, offer was about 6/7 months ago hence the rate.

I can overpay by 10% but not worth it at my current rate, I can earn more on cash haha.

So after my 5 years could I theoretically reduce the remaining 20yr to 15 yr without any fees and just pay more per month? I've asked people about this but never got an answer (I've only asked friends to be fair).
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As others have said yes, just part of the discussion during remortgaging. The one difference for me seemed to be that even though I was staying with the same provider to change term I needed to go through the whole 'check' process whilst I believe if I just moved to a different fix on the same term it would've been a slightly simpler process...
 
HACO said:
House near me went on the market for £650k, now dropped to £575k :cry:
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Yeah loads of houses by me on rightmove are "unexpectedly back on the market" and some "unexpectedly back on the market AGAIN" every other one has been reduced.

A few buyers have had a lucky escape by sounds of it, some of the 3 Bed semis near me have got sellers asking for extra 50% more than what they were previously sold for 4 years ago according to sold prices on rightmove. Its simply unsustainable.
 
Definitely noticing a lot more reductions around here. 4 houses that were sold STC a few months ago are now back on the market for ~20% less than previously.

Houses are also staying on sale for longer. There was a point last year where most houses were having offers out in within 1-2 days. That's definitely slowed down.
 
Jimmyjam said:
Yeah loads of houses by me on rightmove are "unexpectedly back on the market" and some "unexpectedly back on the market AGAIN" every other one has been reduced.

A few buyers have had a lucky escape by sounds of it, some of the 3 Bed semis near me have got sellers asking for extra 50% more than what they were previously sold for 4 years ago according to sold prices on rightmove. Its simply unsustainable.
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Surely they've not escaped unless they were leaving the country or downsizing. I mean they probably made onward purchases which would have been inflated.
 
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