Mortgage Rate Rises

[glenimp617]

Reminds me when we were learning GCSE Maths and all the kids would protest they'd never need this knowledge. I imagine talking about house buying will trigger an even more vocal response lol!

That's a good point. The way things are going, kids won't need to know about mortgages because they'll never afford one.

 

[MikeTheNative]

Thing is you don't even need to work it out yourself these days.
Just need to put the numbers into an online calculator and it will spit out the payments. Good way to see what effect the interest rates have.

 

[413x]

Personal / Home Finances would be far more useful than learning about different people’s irrational beliefs in various Sky Pixies.

Have said this for years.

Of all the things that could be taught at school personal finance should be number one.

I can't think of anything (except basic maths, English language and a few others) that would be more useful.
I mean people using CCs don't understand things like when interest starts, setting up minimum DDs

What more universally valuable course could there be? How much better off might even a few people be?

 

[413x]

That's a good point. The way things are going, kids won't need to know about mortgages because they'll never afford one.

I don't think it's mortgages. But personal finance needs to be taught. It's shocking how few people even know that (technically) you make more by putting into savings if the rate is higher than paying off your mortgage.

So many see the mortgage being the bigger number, so overpaying is "better"

This obviously excludes any personal reasons or special circumstances

 

[MatsyLR]

That's a good point. The way things are going, kids won't need to know about mortgages because they'll never afford one.

More about general finances.
Many don't have a clue what things cost/value of things.
A colleague at work thinks its odd I have a spreadsheet with all my outgoings/incoming for each month, while she lives in her overdraft while ordering take out most days and complaining she has no money.

 

[SpeedFreak]

You don't need a spreadsheet to live financially sensibly.

 

[MatsyLR]

You don't need a spreadsheet to live financially sensibly.

You don't no, but it can be helpful to visualise what you have spent and how much extra you have left after your wages (specially if you dont make much money anyway). Then you can make a informed decission on buying lets just say "extra things"

 

[danlightbulb]

partly annoys me since being being finacially savy comes with the turf for me as an accountant.
I dont get to build myself a cheap extension, do some on the side programmig etc that others get to boost their income.
The bit I am good at is finances, all the "protections" that keep getting applied to narrow the gap end up costing me more.
Changes such as to insurance rules means the bottom moves

Forgive me if I'm extending too far here, but this reads as if you're against raising the bar for customer protections in accounting (because you lose your advantage) but in other threads you're for, for example, raising the minimum wage or raising low pay or giving the public sector inflation payrises, which has the same effect, losing an advantage for those earning higher.

You get annoyed at things reducing your advantage as an accountant, I get annoyed at different generations getting preferential treatment on house prices, pensions or whatever.

There isn't much difference in principle imo.

Ps i agree on the additional income bit. At school it was expected that certain kids would do well academicly and go to uni...personally now I think I'd have been better off getting taught the trades. A train driver job pays more than I earn now (train drivers are well paid, they never told me that at school). School is terrible at setting people up for life skills and helping kids target a career.

 

[MikeTheNative]

You don't need a spreadsheet to live financially sensibly.

Not in theory but in practice some people do and they are terrible spenders.
There's no reason not to have a credit card (if paid off every month), gives you extra protection.
If a person can't trust themselves with it though they are better off without.

 

[Chris Wilson]

You don't need a spreadsheet to live financially sensibly.

Indeed, just some self discipline and balking at the wife wanting to keep up with the Jones'

 

[Doobedoo]

You don't no, but it can be helpful to visualise what you have spent and how much extra you have left after your wages (specially if you dont make much money anyway). Then you can make a informed decission on buying lets just say "extra things"

I don’t use a spreadsheet or need one I’m far from my overdraft each month either. I got into a small amount of debt years ago and the bank wouldn’t help me when I asked, so I made the decision to change my circumstances and always keep a buffer to shield me from unforeseen circumstances.

 

[Mercenary Keyboard Warrior]

Forgive me if I'm extending too far here, but this reads as if you're against raising the bar for customer protections in accounting (because you lose your advantage) but in other threads you're for, for example, raising the minimum wage or raising low pay or giving the public sector inflation payrises, which has the same effect, losing an advantage for those earning higher.

You get annoyed at things reducing your advantage as an accountant, I get annoyed at different generations getting preferential treatment on house prices, pensions or whatever.

There isn't much difference in principle imo.

Ps i agree on the additional income bit. At school it was expected that certain kids would do well academicly and go to uni...personally now I think I'd have been better off getting taught the trades. A train driver job pays more than I earn now (train drivers are well paid, they never told me that at school). School is terrible at setting people up for life skills and helping kids target a career.

Its about 50% as charged m'lord

What I am annoyed about is where "protections" end up costing me money
Eg the insurance one I mentioned, being savvy enough to shop around properly would save me money, I would be rewarded in effect with better pricing.
Those too lazy to do so ensured profits for the insurer and hence they could offer better deals to those who were willing to move.

It happens a lot in finance that in order to protect the lazy they create an environment where they reduce the benefits for those who will take the time to sort the best deal.

There is a very fine line between protecting the consumer and overly influencing the market. We tend to go to far now with the latter, bringing in "protections" that are really ante competition.

Again we have been over this, its very difficult to compare generations. We specifically had teh conversation on my first house and how it was not cheap in comparison to two salaries and in many ways worse than an equivalent people would buy now.
Ignoring the other things I mentioned, such as the additional fees we paid over X% mortgage, the fact tax rates were higher, and tax allowances significantly lower. Etc etc

Dont get me wrong I am not massively hung up on this, its just that being a financial person my only gain to be had as a "side hustle" from my job is being most able to take advantage of that angle. I cant do on the side jobs, that many other professions can do.
Thats my point.

School IMO shouldnt be about telling you train drivers earn good money. Again this is asking the state to find you the opportunities in life.
Its not going to work if 25% of the kids leaving school want to be a train driver

 

[potatolord]

Mortgage selection should be taught in schools instead of a lot of the junk they find time to mull over. Loans and general banking, too.

You can't keep adding the issue of the day to schools' curricula. Especially given the huge lag from being in school to taking on a mortgage.

There is not enough time to deliver everything, so adding new items means taking something else out.

People who are taking on a multi-year financial commitment for tens of thousands of pounds have some responsibility to check things for themselves.

 

[Curlyriff]

The other consideration is that other things were different as well.
Comparing years is very difficult to really do, its always easy to look at the part of the data set that suits.

Eg when I first purchased, the tax threshold was much lower, and the basic rate was 25%.
When I started work a few years earlier iirc it was 27% for the basic rate.

See for comparable rates. https://graphwise.weebly.com/income-tax.html

Dont get me wrong, I am not saying that purchasing a house is easy now. In my living memory and with the conversations I had with my grandparents, its never been easy for normal people to buy and get on the property ladder.
Maybe easier, (and I would certainly take lower prices and higher interest rates over higher prices and low interest rates), but not easy.

Indeed but to spitball a few elements of it you could do

• Wage at purchase
• Interest rate of mortgage
• Value of property
• Salary gross
• Net take home
• Stamp Duty (as applicable)
• Legal fees for completion of purchase

Then do the same for property now and compare. That would show a solid difference in property costs from purchasing a house in the 70's, 80's, 90's. I am sure there are average data and it would have to be done by county or even same town to be a viable compariable but would be interesting to see that data plotted.

 

[Mercenary Keyboard Warrior]

You don't need a spreadsheet to live financially sensibly.

You don't, but it makes it very clear and easy to see the trends in your spending.

People who are taking on a multi-year financial commitment for tens of thousands of pounds have some responsibility to check things for themselves.

This exactly.
Plus I am not sure I would have wanted some of my teachers giving me advice

The number of people who fail to read their mortgage offer is I would say probably 90% plus
Its rare when people ask me about it that they say they have ever read it.
Most of the time the questions they ask are covered in their offer!

 

[bigmike20vt]

I used to be a big spreadsheeter for my finances...... Since getting married and having a child i dont any more due to time, i should probably go back to it as i 100% am no longer making the most of what spare money i have

it used to be i knew to the nearest £50 what my money was doing. The thing was i actually enjoyed doing it.. We did a total ground up redecoration of our house with 2 major extensions - front and rear and i recorded every paint brush, every pack of sand paper etc. (we spent in region of £120k on it and that included doing much of the donkey work ourselves) *I just realised that sounded very insulting to professional painter and decorators and handy (wo)men - sorry was not my intention!!!! my dad was self employed and did that stuff years ago and i absolutely respect the trade)*

is it necessary? no, so long as a person lives within their means of course not, but doing it for a few years does give you a good understanding of where your money goes and what not, and people who are sailing close to the edge probably should do it..... for everyone else, it can be a useful tool to keep on top of things but its not essential. What ever works for the individual..

Having written the above i think i will to go back to it to be honest.

 

[Mercenary Keyboard Warrior]

Indeed but to spitball a few elements of it you could do

• Wage at purchase
• Interest rate of mortgage
• Value of property
• Salary gross
• Net take home
• Stamp Duty (as applicable)
• Legal fees for completion of purchase

Then do the same for property now and compare. That would show a solid difference in property costs from purchasing a house in the 70's, 80's, 90's. I am sure there are average data and it would have to be done by county or even same town to be a viable compariable but would be interesting to see that data plotted.

You could, but its basically irrelevant anyway.

You need to get with it now and not complaining about X in the past etc.

Its just so different now. There are so many factors such as in the 70s and early 80s you would struggle to get a mortgage for many people, capital controls.
It was very much a thing to build a relationship with your local building society as it was often the only access to borrowing people had.
banks mainly didn't offer mortgages. Its just a different world.

 

[Curlyriff]

Forgive me if I'm extending too far here, but this reads as if you're against raising the bar for customer protections in accounting (because you lose your advantage) but in other threads you're for, for example, raising the minimum wage or raising low pay or giving the public sector inflation payrises, which has the same effect, losing an advantage for those earning higher.

You get annoyed at things reducing your advantage as an accountant, I get annoyed at different generations getting preferential treatment on house prices, pensions or whatever.

There isn't much difference in principle imo.

Ps i agree on the additional income bit. At school it was expected that certain kids would do well academicly and go to uni...personally now I think I'd have been better off getting taught the trades. A train driver job pays more than I earn now (train drivers are well paid, they never told me that at school). School is terrible at setting people up for life skills and helping kids target a career.

That the thing, train drivers, lorry drivers, tradespeople such as plumbers, electricians, brickies etc are all well paid relative and good solid jobs. I would say things such as train and lorry drivers may well phase out over next couple of decades as we go more and more autonomous in those areas. But the others are still very much trades that will continue.

 

[glenimp617]

You don't need a spreadsheet to live financially sensibly.

I literally live in my excel spreadsheet. I've mapped out the entire years finances already to plan for a garden renovation, holiday and the dreaded mortgage renewal in July

 

[Mercenary Keyboard Warrior]

That the thing, train drivers, lorry drivers, tradespeople such as plumbers, electricians, brickies etc are all well paid relative and good solid jobs. I would say things such as train and lorry drivers may well phase out over next couple of decades as we go more and more autonomous in those areas. But the others are still very much trades that will continue.

Yep.
When I was at school the "thick boys" were directed towards trades, even being sent out for a day to visit the local college to see which one they fancied most.
(the thick girls were directed towards shop work, care etc, how times change!)
In the late 80s one of those trades was an ok job, but by todays standards they were not as well paid.
What we see now is the drive for uni level education for the masses, meaning a lot less were diverted to trades and as such a shortage has happened. And then supply and demand dictates the salary.

Again its that comparing things that can see decades of impact culminating in the scenario now.