Mortgage Rate Rises

Mercurial said:
Very few people went to university back then, marriage allowance by the 90s was paltry, council homes were available but you had to be teenage and pregnant otherwise a very long wait. By the mid 90s final salary pensions were on the way out.

I do remember mass unemployment and a huge number of house repossessions though, that seems to be glossed over nowadays.
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My dad always mentions something to do with the housing crash and something that was similar to a mortgage back in the 90's that people took out. I cant remember exactly, but he said it was similar to a stock or a bond and it promised to pay off your mortgage after x amount of years. Unfortunately a lot of people got stung by it, instead of writing off the mortgage they ended up owing 20k or something along those lines.

Wish i knew what the term he used was.
 
Jay85 said:
My dad always mentions something to do with the housing crash and something that was similar to a mortgage back in the 90's that people took out. I cant remember exactly, but he said it was similar to a stock or a bond and it promised to pay off your mortgage after x amount of years. Unfortunately a lot of people got stung by it, instead of writing off the mortgage they ended up owing 20k or something along those lines.

Wish i knew what the term he used was.
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Endowment policy.
 
martin363 said:
Someone pointed out to me the other day, when I got my first house (1997) a max mortgage was 3.5 times a couples earnings, or 3 times single. Therefore a 6% interest rate at the time (the norm) was significant, but a much lower impact on available spending than now, where a typical mortgage may be 5.5 times a couples earnings, or more....
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5.5? I don’t know any banks that will lend beyond 4-4.5x on a couples income. That’s also with a lot of assessment on their outgoings/lifestyle spending.
 
martin363 said:
Someone pointed out to me the other day, when I got my first house (1997) a max mortgage was 3.5 times a couples earnings, or 3 times single. Therefore a 6% interest rate at the time (the norm) was significant, but a much lower impact on available spending than now, where a typical mortgage may be 5.5 times a couples earnings, or more....
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House prices as a multiplier of earnings are that much higher these days.

It tends to get harder and harder to get onto the ladder, I bought my 1st house about a decade ago, and I could not afford to buy the house I'm in now without having a deposit of like £200K or more.
 
My current fixed rate ends in November next year, im currently on 1.54%. i have 18.5 years left so 17 by the time my fixed is up. £109k left as of today. If i have 10k to overpay would it be worth doing?

looking at current rates it looks like my payments would increase by around £200, i know the rates will change by the time my fixed is up, just using todays as a ref point. It isnt the end of the world but not ideal either as i dont have a huge amount of disposable cash

i know im over a year away but its all stressing me out a bit and trying to make a plan of action now, im not particularly great with this so just after some advice.
 
HungryHippos said:
House prices as a multiplier of earnings are that much higher these days.

It tends to get harder and harder to get onto the ladder, I bought my 1st house about a decade ago, and I could not afford to buy the house I'm in now without having a deposit of like £200K or more.
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Yup - I had a deposit of £50k and I’d now need literally £158k more cash to hand to buy my first house.

£158k more!!!

Keep in mind, that’s £208k deposit maxing out borrowings to make the purchase, as a professional and a higher rate earner. And my deposit was a gift… so I had it super easy really.

When young ‘high earner’ professionals (even those with significant family help) might struggle, how the heck is anyone else going to have a chance…

Very tough times for young adults.
 
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elh_2009 said:
My current fixed rate ends in November next year, im currently on 1.54%. i have 18.5 years left so 17 by the time my fixed is up. £109k left as of today. If i have 10k to overpay would it be worth doing?

looking at current rates it looks like my payments would increase by around £200, i know the rates will change by the time my fixed is up, just using todays as a ref point. It isnt the end of the world but not ideal either as i dont have a huge amount of disposable cash

i know im over a year away but its all stressing me out a bit and trying to make a plan of action now, im not particularly great with this so just after some advice.
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You will earn more interest putting that in a savings account for the duration rather than overpaying your existing mortgage now. Then when your deal is up, make the one off payment then if you need to.
 
i have just over 10k allowed for overpayments this year, so you think keep the money and then near the end of my fixed asses the rates and if its still high pay off then?
 
elh_2009 said:
My current fixed rate ends in November next year, im currently on 1.54%. i have 18.5 years left so 17 by the time my fixed is up. £109k left as of today. If i have 10k to overpay would it be worth doing?

looking at current rates it looks like my payments would increase by around £200, i know the rates will change by the time my fixed is up, just using todays as a ref point. It isnt the end of the world but not ideal either as i dont have a huge amount of disposable cash

i know im over a year away but its all stressing me out a bit and trying to make a plan of action now, im not particularly great with this so just after some advice.
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Going off todays rates approx figures

£100k @ 6% for 17 years is £783 p/m
£90k @ 6% for 17 years is £705 p/m

Is the 80 quid saving per month worth it for you? Or would it be better to have savings for rainy day ?
 
kevman said:
Going off todays rates approx figures

£100k @ 6% for 17 years is £783 p/m
£90k @ 6% for 17 years is £705 p/m

Is the 80 quid saving per month worth it for you? Or would it be better to have savings for rainy day ?
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Thanks for the breakdown

probably worth saving the money for a rainy day, just hope thing get slightly better in the next 18 months and its not as bad as they are predicting!
 
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