I'd buy your house and then I'd keep the rent just so you could afford it but so you couldn't save thus keeping you in the rent cycle and ensuring my right to landlordism is maintained above all else, then I'd buy a few more houses and keep that cycle going.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
bUt yOu wOuLdNt mAkE aNy mOnEy
*excluding massive equity growth and gentle 8% returns for no labour
Soldato
I suggest we have a good whipround and form a collective to be dLockers new landlord.
Everytime we see him post on here we can assume hes got potential to work some more and put his rent up another £1
Everytime we see him post on here we can assume hes got potential to work some more and put his rent up another £1
Sadly interest rates are higher because inflation is too high so savers are worse off than they were before even though they are getting a bit more interest.It's great!
It can keep going up as far as it likes for me
I like these numbers! (bottom right)
Rip!
Basically 2x the cost of the house! Still. If its 23 years you must be able to manage it!
Soldato
But dLockers is considerably richer than yo and he is also paying all our taxes for us. Got to give the lad a break.
Soldato
IIRC my first mortgage the interest was over 200% of the borrowed principle.
When rates are 10% ballpark its bloody painful.
Soldato
To we savers and the bank.
It gets deleted.
Soldato
But wasn't the house 50p?
hehe no
Numbers are vague now in my memory. Was around 1990. House was a 1890s 2 up 2 down, with 2 story rear extension for kitchen and bathroom.
I think we paid about 27k for it. For reference on salary I was a part qualified accountant and on about £7k, my gf was a receptionist and on about £5k
It was practically on the limit of affordability of 2.5x salary. The mortgage was the majority of her take home wage.
last time i tried to formulate it https://forums.overclockers.co.uk/threads/mortgage-rate-rises.18954903/page-271#post-36291714
if bank had the money to loan to you, bank gets all of it as profit
if money came from other peoples savings, interest goes to pay their savings interest
if money came from bank of england, it gets deleted
Mental isn't it! I love how nuanced and complicated the financial system is (genuinely).
To this man: https://www.google.com/amp/s/amp.th...-for-wage-restraint-to-help-control-inflation
Remember not to ask for a pay rise though, or he will put the rates up again.
Well, that depends. 10% on a small number is still a lot less money than 3% on a large number.
I have to keep reminding my parents of that when they try to make out they didn't have it mega easy. The house price rises compared to salary increases since the 80's are hilarious.
The way things are going, we are going to get really high interest rates on the already obscene amounts needed to buy a house these days. A recipe for disaster.
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Your retail bank. But if they borrow of the cb they just get the spread and the cb gets the base rate.
Of course its more complicated, this is a very simple way to answer your question.
Cb don't pay tax.
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Soldato
Which is why I quoted salaries for relativity.
As a part qual at that stage it would probably be £35k and a receptionist maybe £20-23k now. So house value around 3x joint wage vs 2.5 then, but interest % higher, which is what matters most at the start.
Which would make the affordability a bit worse, last time I looked at the house its value was something like £140k. Just looking now sold for £225k earlier this year.
Bonkers.
The big difference was that if you could afford to start to reduce the term with overpayments the impact was significantly higher.
Don't get me wrong I would rather have lower property prices and higher interest rates rather then the opposite.