Soldato
Sunak has pretty much much confirmed there'll be no state help for mortgages.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
If they had money they wouldn't be defaulting on their mortgage.
I mean money left over from the forced sale of their house they can't afford.
Soldato
Agreed, too many people in the world.
Where did I say renters get nothing? It could come with rent controls to prevent any increases to rents.
How any different to furlough, COVID fraud, or energy support going to millionaires?
Why couldn't it come with rent increase caps too? And you're making assumptions about how the policy might work there, it could be restricted to only remortgaging, not moving, and you're not allowed to increase borrowing or term if you take the option, for example. I'm sure there are ways to design the policy so that it is a genuine support against spiking rates not a free for all money print.
Didn't they also say there would be no support during COVID, then they did things, didn't they also say no energy bill support, then they did it? All last minute announcements if I recall.
Last edited:
Very different. Furlough was there because the Govt mandated that everyone stopped work and stayed inside, you had no other choice.
With your mortgage payment now, you do have a choice. Downsize, sell up entirely, cut expenses or get a better/second job. Maybe not desirable choices, but choices nonetheless.
Suspended
I think we need a statutory right to increase mortgages outstanding when necessary, within a % of original loan amount. (IE cashback)
This gives the breathing room for those with decent equity.
Was also thinking those with low equity, find a way to get the social housing providers engaged, so you can get the "owner" into a shared ownership model, even if short term.
Could also make it a statutory right to request a say 10% extension in terms of length of mortgage (from original term length).
Eg we could do a few things that would give temporarily struggling homeowners a lifeline at their discretion
This gives the breathing room for those with decent equity.
Was also thinking those with low equity, find a way to get the social housing providers engaged, so you can get the "owner" into a shared ownership model, even if short term.
Could also make it a statutory right to request a say 10% extension in terms of length of mortgage (from original term length).
Eg we could do a few things that would give temporarily struggling homeowners a lifeline at their discretion
Last edited:
When systems have loads of rules they become impossible to administrate.
And its indefensible to give money away like that.
There would be so many edge cases where some would miss out and others would unfairly benefit.
At the end of the day, if you can't afford your mortgage you can't afford it. It's sad but you can't be bailed out by the state for everything.
Soldato
I think many people won't have any choices here either really.
Downsize - how if you're in negative equity because of the crunch?
Sell up entirely - and live where? Social housing provision is almost non existent now. Also again potential negative equity issue if it gets bad enough.
Cut expenses - many already are, and how can you cut enough bills or hobbies to meet a mortgage cost that, for example, might double from £900 a month to £1800?
Get a second job - might be an option for some, but even people with good jobs and middle earner salaries are going to be caught up in this because of the scale of the change. It's not easy to increase your salary if it's already above average. It's also not easy to increase your salary if you're at the lower end and, for example, only have experience in certain types of work, for example factory work, retail or warehousing.
Ok. Let me spell it out another way, why should I fund your mortgage?
Soldato
Yes it would, but there are limits to what people can stretch to. What if base rates end up at 10% or more, serious trouble for millions with absolutely no way to find the extra cash.
This. At the end of the day
Soldato
That's why I said anything they can do would be kicking the can down the road, but kicking the can down the road is better than force evicting people if the interest rates fall in 2-3 years time.
Interest only or some variant of interest only + some monthly payment towards principal + extend the mortgage length makes the most sense to me, it also doesn't give free money to anyone.
Interest only or some variant of interest only + some monthly payment towards principal + extend the mortgage length makes the most sense to me, it also doesn't give free money to anyone.
Right, so if they can't do that they lose out, that's life. Sometimes you win, sometimes you lose.
You seem to want the Govt to stop any bad thing from happening to people and they can't. Well, tbh, like a lot of the middle, they didn't really care while this has been happening to the poor since ever, they just care now because its affecting them.
Soldato
Because it's no different to the support lots of other people get already for various things in society. We all fund lots of things.
In this particular case, a mortgage crunch could effect millions, a big enough number that without support could push the country into recession, costing jobs and businesses. Mass repossession would also increase the burden on the state to provide alternative housing which currently doesn't have the capacity to support a problem on this scale.
The support wouldn't extend to capital repayment or the original accepted interest, it would only apply to the interest element above a certain threshold where the mortgage holder couldn't have foreseen or have been expected to take that scale of risk.
Renters should also be protected so no increase in rents.
There is a difference in my mind to an individual winning or losing based on their own circumstances or choices, and millions of people potentially facing financial ruin through nothing they could have done about it. Yes, clearly the Government is there to protect that scale of a problem, as it did with furlough for that group, because when/if the problem reaches that level it will effect more than just mortgage holders.
Of course, this problem were facing now is partly a result of all the cash given out during COVID. The government helped make the problem, they should therefore support those now effected by it.
Obviously we're not going to agree on it, but in time a sufficient weight of people effected might force the government's hand on it.
Last edited:
Soldato
Oof...
Sky news...
'The average mortgage rate for a two-year fixed deal has risen to 6.01%, according to a financial information company.
Meanwhile, the average five-year fixed rate mortgage has increased to 5.67%, Moneyfacts said.
The two-year rate has risen from 5.98% on Friday, while the five-year deal has increased from 5.62%.
A two-year fixed deal is at a high not seen since December 1 last year, when the market reeled from the Liz Truss government.'
Sky news...
'The average mortgage rate for a two-year fixed deal has risen to 6.01%, according to a financial information company.
Meanwhile, the average five-year fixed rate mortgage has increased to 5.67%, Moneyfacts said.
The two-year rate has risen from 5.98% on Friday, while the five-year deal has increased from 5.62%.
A two-year fixed deal is at a high not seen since December 1 last year, when the market reeled from the Liz Truss government.'
There’s going to be an awful lot of disappointed sellers if they’re still asking silly prices.
Soldato
The previous MCOB stress test was 3% which isn't that much considering that rates were as low as 1.something% in the last couple of years - the current rates for a 10 year fix are just above this stress test which isn't all that high historically (~4.8%).
The 3% stress test was removed last August by the FCA. Regulations need to get tighter. not softer.
I think we should adopt a model more like Canada's, whereby a more average historical rate is used (5.25%) as a stress test, it would have helped with this scenario where the stress test became fairly redundant.
Last edited: