Mortgage Rate Rises

CapitalOne said:
It’s not about the prices when it comes to paying off the mortgage, it’s the freedom you get as a result plus the x amount a month you can now do something else with.
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I agree with you on that point, I was using your story to demonstrate why a certain demographic want house prices to rise :)
 
Some people want house prices to rise as it may put them into a lower LTV bracket and so remortgages will be lower if coming to the end of a fixed deal.

Other than that, I agree. A lot of the people that want it to rise higher than inflation seem to have some kind of psychological ego massage that they have "made £xxx,xxx" on their house or it's "worth £xxx,xxx" but, until this is freed up (usually via selling), it's not actually available to you.

It's simple wealth snobbery a lot of the times.
 
Richie said:
Some people want house prices to rise as it may put them into a lower LTV bracket and so remortgages will be lower if coming to the end of a fixed deal.

Other than that, I agree. A lot of the people that want it to rise higher than inflation seem to have some kind of psychological ego massage that they have "made £xxx,xxx" on their house or it's "worth £xxx,xxx" but, until this is freed up (usually via selling), it's not actually available to you.

It's simple wealth snobbery a lot of the times.
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There are some legitimate reasons for wanting, hoping UK prices rise. My wife and I want to sell up in the UK in the next 5 years and use the money to buy in Athens, As long as UK price rises outpace Athens rises, we are very happy.
 
martin363 said:
There are some legitimate reasons for wanting, hoping UK prices rise. My wife and I want to sell up in the UK in the next 5 years and use the money to buy in Athens, As long as UK price rises outpace Athens rises, we are very happy.
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That's not a legitimate reason at all, it's an entirely selfish one.
 
ci_newman said:
That's not a legitimate reason at all, it's an entirely selfish one.
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Of course it's a legit reason.

ci_newman said:
This is the reason many people (particularly the elderly) are happy house prices are rising, because when they retire and downsize their "equity" is worth much more.

Not directed at CapitalOne, but his £550k home is now worth 1.2 million. He could sell for 1.2million, downsize to a house thats worth £300k and have a tax free lump of cash of £900k.

All he had to do was live there for 17 years and he's "earnt" £650k for doing not much at all.
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Remember that he never paid £550k for the house, so it's not as big of a profit as you've mentioned as you've forgot to include the interest charges.

Which is also another reason why people want house prices to rise, because other wise, their £500k house ends up costing them £700k with interest and they end up losing money.
 
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ci_newman said:
That's not a legitimate reason at all, it's an entirely selfish one.
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Its a legit reason for the person though.

I'd love house prices to drop/stabilise. For selfish reasons it's because I want to get a new house in next 2 years and price rises increases the likely hood I'll need a mortgage increase
 
unwashed potato! said:
Of course it's a legit reason.


Remember that he never paid £550k for the house, so it's not as big of a profit as you've mentioned as you've forgot to include the interest charges.

Which is also another reason why people want house prices to rise, because other wise, their £500k house ends up costing them £700k with interest and they end up losing money.
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We paid 405 ffs in 2006, with approx 100 down. In 2008 we spent another 100k on an extension. So yeah we never paid 550 I have no idea where that figure comes from. Currently fixed at 1.89% until end of term at which point it will all be paid off.

Whilst paying the mortgage other investing and saving has been taking place. My post clearly states my point, which is “retirement” for us is based on paying this off as opposed to pensionable age. I cannot wait. See you in the Caribbean!

We have of course spent other money on new windows, a new roof, garden etc but that wasn’t borrowed.

I think I’m in the realms of too much information now.
 
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CapitalOne said:
We paid 405 ffs in 2006, with approx 100 down. In 2008 we spent another 100k on an extension. So yeah we never paid 550 I have no idea where that figure comes from. Currently fixed at 1.89% until end of term at which point it will all be paid off.

Whilst paying the mortgage other investing and saving has been taking place. My post clearly states my point, which is “retirement” for us is based on paying this off as opposed to pensionable age. I cannot wait. See you in the Caribbean!

We have of course spent other money on new windows, a new roof, garden etc but that wasn’t borrowed.

I think I’m in the realms of too much information now.
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I'm not going against what you've said, sorry if it was taken that way, and was ysikg the figures the other user posted. My point was just that, it's not a straight simple, "I bought my house at this price, and sold it as this price, so there for I've made the difference in profit" as it ignores interest paid, work done etc.
 
In 2006 house prices had been rising for a solid 10 years, people felt the same way about unsustainable house prices back then as well. 1996 - 2006 average house prices went from 50k to 150k, then they crashed a bit and didn't recover until 2014 or so, its all happened before and it will all happen again.
 
ChrisD. said:
Missing out on potentially decades of compounding interest... screw that. I'd rather still be paying a mortgage as cheap debt if it means my portfolio is making actual usable money.
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And what happens if you loose your job in your 50's, which many are facing right now?

The last thing you want to be worrying about is how to pay the mortgage when you have zero or very little income. Compounding interest doesn't matter if you have no income such as an job.
 
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Anyone relying on house price inflation to fund their retirement is running a risk as far as I am concerned. For me it's either an income generator (i.e. rent it out to provide income plus rent for somewhere else) or it's "housing credits" so you can move.
 
malachi said:
And what happens if you loose your job in your 50's, which many are facing right now?

The last thing you want to be worrying about is how to pay the mortgage when you have zero or very little income. Compounding interest doesn't matter if you have no income such as an job.
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Umm, then you use some of your investments to pay the mortgage.
 
malachi said:
And what happens if you loose your job in your 50's, which many are facing right now?

The last thing you want to be worrying about is how to pay the mortgage when you have zero or very little income. Compounding interest doesn't matter if you have no income such as a job.
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That’s what your savings are for.

You still have bills to pay, and food to buy if you lose your job in your 50s. Your house with no mortgage isn't buying stuff for you.
 
For me in retirement, my house is a place to live, which we are doing up with no expectation of selling on at a profit. We only need pay the bills and the world stays outside the front door unless invited in. It is a small haven.
 
CapitalOne said:
We paid 405 ffs in 2006, with approx 100 down. In 2008 we spent another 100k on an extension. So yeah we never paid 550 I have no idea where that figure comes from. Currently fixed at 1.89% until end of term at which point it will all be paid off.

Whilst paying the mortgage other investing and saving has been taking place. My post clearly states my point, which is “retirement” for us is based on paying this off as opposed to pensionable age. I cannot wait. See you in the Caribbean!

We have of course spent other money on new windows, a new roof, garden etc but that wasn’t borrowed.

I think I’m in the realms of too much information now.
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I'm sorry, I wasn't intending to infer you were part of the "house prices must rise crowd". You had posted your own experience of improved equity in the house and I was just using it as an easy example of why *some* people (and sorry, I didn't mean to infer you), would be happy that they now had additional value in their home that they could sell to release a significant lump sum of cash. It was supposed to be a generalised comment on my part rather than focusing on you as an individual
 
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ChrisD. said:
That’s what your savings are for.

You still have bills to pay, and food to buy if you lose your job in your 50s. Your house with no mortgage isn't buying stuff for you.
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EvilRob said:
Umm, then you use some of your investments to pay the mortgage.
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And how many of the UK population do you think are in a position to do that? Not many think about their future other than their joke of an pension.

You already seen how many people in this thread who are bricking it with the increase of interest rates. Imagine if they lost their jobs too.

A house with no mortgage is still guaranteed I still have a roof over my head when things get tough and the bank cant take it away from me.

Silly to think you should be still paying a mortgage into your retirement age or the day you die.

The best debt is zero debt, good or bad.
 
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