Mortgage Rate Rises

I have to say, this can't carry on forever. House prices must come down. If first time buyers can't get on the ladder, nobody higher up can move.

It will be painful for those who bought in the last few years, but they must come down to sensible levels as wages aren't going up enough.
 
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dazzlaa said:
I was looking at a huge 'new-build' estate that has been ongoing for a while near me this weekend. Still quite a way to go but seeing it did have me thinking that if they aren't finished soon they may struggle to sell. Rates do seem to be creeping up at a steady rate of climb.
Thankfully I have just over 3 years left of my fixed deal at 1.97%, hoping that after 3 years things have stabilised somewhat.
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Maybe, but I've NEVER in the last 15yrs seen a housing estate which hasn't sold all 100% off plan. Not in the east midlands at least.

Interest rates may prevent them from doing so, but I think given the chance people will want to buy.
 
413x said:
It must be that "I am worth 600k, last year I was worth 500k".

I feel from personal experience people don't gain until they are dragged kicking and screaming.

My parents will not downsize. They pay huge heating, council tax, maintenance cost etc and have even taken equity out rather than downsizing. Even though they are getting on now.
They simply won't downsize? Maybe it's seen as "going backwards".

Boggled my mind. All that money locked away while they sit there health dwindling. Rather than spending and enjoying. Or simply banking it and having an easy end of life.
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Maybe they want to leave it to you once they've gone?
 
413x said:
Apparently there's talk of getting us kids as joint owners on it or something. No idea what that really means. Or if it's even possible.
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I've heard something about that. Maybe I'm wrong, but if they do it X number of years before they die, you won't have to pay inheritance tax.
 
Screeeech said:
For house prices to stay the same, whilst the base interest rate goes up past 5-6% - it doesn't add up, I don't understand how house prices can remain the same if the cost of mortgages gets very expensive?

Or is that wrong?
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people will happily take on huge levels of debt, if the bank lets them

I've long struggled to understand how the young members of my team have been able to buy the houses they have. They are worried sick about the rates going up.
It simply doesn't enter peoples minds to budget for a rate rise. They are maxed out, so when their fixes end they have nowhere to go. They can't afford a penny more.

I think banks will have to switch everyone onto interest only mortgages, where they are technically renting from the banks.

What confuses me is that after the 2007/2008 crash I thought banks had to have tighter lending criteria. How then, has my cousin who earns below UK average, and his wife who earns minimum wage part-time been able to buy a 5 bed detached house?
 
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Screeeech said:
Yeah I mean, that's true I guess - but wasn't that already happening, as house prices have gotten very expensive and many people are already indebted to the eyeballs, where the interest rates were low.

I mean, in order for the banks to lend huge amounts of money where the monthly payments aren't £2-3k a month - how exactly would they do it?
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People ultimately need to be responsible for their own finances. Pesonally, I wouldn't go over a set amount per month. There is a calculation, or a generic term like 20/30/40 something. Can't remember it now, or maybe it was for a car loan lol anyway, my point is that you don't want to be going over a certain percentage of your income per month on a mortgage, or anything for that matter. People have been going silly. Maybe in the hope that as houses go up, wages will also and in the future as the LTV drops they will be better off.

My take is that the gap between house prices and wages has been too large for too long and that it couldn't carry on forever.....as well as low rates.

This is why I was always annoyed at the housing schemes and stamp duty holidays.
 
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grudas said:
I really hope at worst they stagnate but I hope no crash happens. I’ve been working towards buying our first for many years and we finally got into it this year. We’re on 1.99 for 3 years and I calculated that we can afford to 5-6% if required but I hope we don’t get to that. Of course in 3 years things can change massively as we have seen what the last 3 have done.
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Well at least you thought about 5-6% rates. Some people didn't, and can't afford it.
 
413x said:
With 310...yeah... Nope!
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Bloody hell mate, can you imagine!

When I was young debt never really bothered me, but it does now, to the point a few years ago I started to really worry and had sleepless night. Probably the best thing, as I went on a mission for a year to clear it all right down and the only debt I have now is a small mortgage. We'll I say small, it's not 6 figures at least.
 
413x said:
I can probably clear down a big chunk of 207 in 5 years. But 310? Not a chance. To me that is an irresponsible account to lend 2 people on our salaries. (74k)

I know its under 5x but still seems like 5x is too much
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as a father of an 11 and 13 year old, I worry what the future has in store for them. They'll probably be living with me forever :cry:
 
I'm cancelling my new car order today, that money is going towards the mortgage. Think I can shave another year off it.
To be honest, that was my original plan but I got a bit carried away.
 
413x said:
People saying they saw all this coming.
Low rates lasted years. There's no reason this couldn't have all started years ago or years later.

So do you wait forever for a crash? That may come next year or 10 years down the line.

Also not everyone is an expert in finance. Far from it. And you're always pushed to max out your mortgage. All the "experts" you trust tell you "how much you can borrow".

And often it's no bad thing. Most of the last 10 years it's been the right thing to mortgage to the max. But you can never know either way.
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The older I get, the more I realise nobody knows what's going on
 
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