Mortgage Rate Rises

[dlockers]

A midwife , someone who probably earns less than 100k didn't borrow 500k. I said borrow 500k.

How much do you think she is allowed to borrow, to afford a 1.5 bed cottage?

 

[Richie]

When do you realise these problems are not the making of 'society' directly, but from the incapable people in power.

I do realise that. I realise that others decisions can have an impact on me and so I try and mitigate where I can and, where I can't, I just have to get on with it.

You essentially seem to be of the belief that only your decisions should impact you and, should other's decisions affect you, you want compensated....

Helping yourself is not possible when your mortgage or rent goes up by hundreds a month.

Yes it is possible in many circumstances. Reducing spending in other places for example. Yes, there are people that have cut back everything but, if you want to use that as your argument, then I will use the argument of - there's people out there that CAN cut back but refuse to do so and expect the government to cover the difference because they have done so I'm the past

Both are true but, while we run a society where the government bails everyone out for every hard time, we can't expect people or society to be fiscally responsible making the problem worse.

 

[neocon]

How much do you think she is allowed to borrow, to afford a 1.5 bed cottage?

200k at most. She must have already had equity.

 

[dlockers]

Reducing spending in other places for example.

The sad thing is, my main lever for when my mortgage hits £4k/mo is to sell my car (owned outright) and take a PCP. So I'll get even more debt .

Win win for the banks! They either buy my house cheap, take my interest payments, or sell another financial product lol.

 

[ci_newman]

Who will get relief in this hypothetical situation, people with a mortgage that have moved onto higher rates? What about a new buyer today, would they get relief too?

If you've actually been following, the suggestion was to reintroduce tax relief on mortgage interest payments as was around in the 80s and 90s. Therefore anyone with a mortgage gets the relief.

 

[ChrisD.]

The sad thing is, my main lever for when my mortgage hits £4k/mo is to sell my car (owned outright) and take a PCP. So I'll get even more debt .

Win win for the banks! They either buy my house cheap, take my interest payments, or sell another financial product lol.

Ha, something I'm considering doing, even though I vowed never to be in the PCP trap again.

 

[Hagar]

So an additional tax allowance of 30K, value in 2000, CPI has gone up about 70%, say up to 50k, a normal rate taxpaying mortgage holder would benefit by up to 10k per annum.

House price increases anybody. Landlords would take it to the bank.

EDIT, the above is wrong see below.

 

[dlockers]

House price increases anybody. Landlords would take it to the bank.

Not our supremely altruistic landlords on this very forum I would imagine.

 

[Mercenary Keyboard Warrior]

So an additional tax allowance of 30K, value in 2000, CPI has gone up about 70%, say up to 50k, a normal rate taxpaying mortgage holder would benefit by up to 10k per annum.

House price increases anybody. Landlords would take it to the bank.

Negative

Its MIRAS or equivalent we are talking about here.

You get tax savings on the INTEREST on the debt of £50k in your example.

Say 50K at 5%, = £2,500 you save the tax on that so @20% = £500 a year knocked off mortgage interest.

Part of the reason it was canned was in the grand scheme of things it didn't make that much difference.

 

[danlightbulb]

You essentially seem to be of the belief that only your decisions should impact you and, should other's decisions affect you, you want compensated....

I do think that if someone has just tried to do the right thing, against a tidal wave of obstacles, then it isn't right for that person to suffer no. This is especially true when help does seem to be handed out willy nilly for any other problem, just not the problem my cohort seems to be suffering from.

Do you think house buyers now want to spend 5x their salary on a house? Do you think they don't know deep down that this is stretching or risky, or inherently overvalued? It is not a choice for many people.

Now I agree with your point that some people have made that choice and do have substantial headroom. So the clear answer is to stop those people spending somehow, not forcing a group that has little into further poverty.

 

[danlightbulb]

Part of the reason it was canned was in the grand scheme of things it didn't make that much difference.

Maybe back in the 90s it didn't, but what's the figures on 250k debt at 6%?

 

[dlockers]

Maybe back in the 90s it didn't, but what's the figures on 250k debt at 6%?

or 685k of debt at 6%. It'd be a game changer

 

[Jono8]

Maybe back in the 90s it didn't, but what's the figures on 250k debt at 6%?

Probably ~£3000

So significant.

 

[Hagar]

Negative

Its MIRAS or equivalent we are talking about here.

You get tax savings on the INTEREST on the debt of £50k in your example.

Say 50K at 5%, = £2,500 you save the tax on that so @20% = £500 a year knocked off mortgage interest.

Part of the reason it was canned was in the grand scheme of things it didn't make that much difference.

I stand corrected, thanks.

So the absolute size of the mortgage is limited to the allowance in terms of tax reduction. In which case a mortgage of 50k gets the same benefit under MIRAS as one of 500k?

 

[Mercenary Keyboard Warrior]

I stand corrected, thanks.

So the absolute size of the mortgage is limited to the allowance in terms of tax reduction. In which case a mortgage of 50k gets the same benefit under MIRAS as one of 500k?

Indeed that was how it worked before.

Surprised you don't know this you would have had MIRAS wouldn't you?

 

[413x]

Ever since furlough (which I agreed with) and then further bolstered by the energy support, everyone now seems to think that they should be bailed out/supported for every financial impactful situation.

The public purse cannot afford it. If we are to bring inflation down then we need people to stop spending not giving them more free cash which just keep inflation up.

If mortgage support happens, what will we be supporting next?

I agree mortgage support shouldn't be subsidised by the state.

I think you should be able to have this 12 month holiday (after all, it only hits your lifetime debt)

I don't think using it should screw you later by marking your credit file.



But mainly I think inflation should be handled by something else additional rate rises. Something that impacts the wealthy not helps them. Because that's what rate rises do.

 

[413x]

All that furlough money they printed got hoovered up(directly or indirectly) by the wealthiest, who are not getting taxed appropriately so the cash never completing its journey back into the public coffers.

Any future schemes need to be better thought so it's not just another free game of hungry hippos with the balance going on the nation's credit card

This needs addressing. It really does.
So much untapped wealth. It's easy to go after salaries.

 

[413x]

I sold my 1.5 bed 600sqft cottage for £525k to an NHS midwife lol. Look outside of your own postcode for once.

Old? Or Inherited Money?

 

[Hagar]

Indeed that was how it worked before.

Surprised you don't know this you would have had MIRAS wouldn't you?

In the mists of time undoubtedly. Twenty odd years ago exceeds my records of taxation and my memory it seems.

 

[Mercenary Keyboard Warrior]

This needs addressing. It really does.
So much untapped wealth. It's easy to go after salaries.

Indeed which is why I am a long term supporter of transitioning to recovering some taxation via wealth taxes.

If you lower income tax you push the burden back into later life for many, allowing them to get set and then to pay more when less at risk financially.

One of the biggest draws to salary taxation was that it was hard to avoid for most. Only the really rich would have the opportunity to avoid taxes.
Now contractors etc means its a broken model.