Mortgage Rate Rises

[decto]

Plenty of people I work with have £500+ lease deals on nice cars (actually mostly new cars but not that nice) but mid thirties and struggling to save a deposit.

Personally approaching my 50's, mortgage done so now saving hard for deposits for the kids as I doubt houses getting any more affordable.

Interest rates were 6-7% when I bought this house with a 5.2x salary multiplier... As the rates fell I've never dropped the payment and even pushed it up a little so paid off in half the original term.

Just checked and my house value is pretty much 1:1 with inflation over the period.

 

[413x]

Plenty of people I work with have £500+ lease deals on nice cars (actually mostly new cars but not that nice) but mid thirties and struggling to save a deposit.

Personally approaching my 50's, mortgage done so now saving hard for deposits for the kids as I doubt houses getting any more affordable.

Interest rates were 6-7% when I bought this house with a 5.2x salary multiplier... As the rates fell I've never dropped the payment and even pushed it up a little so paid off in half the original term.

Just checked and my house value is pretty much 1:1 with inflation over the period.

500 a month? Bajesus!

 

[tonys]

500 a month? Bajesus!

If they are spending that a month on a car, that's why they struggle to save a deposit.

 

[b0rn2sk8]

Not sure it’s the norm those for people who say they can’t afford a house deposit. It’s a comment normally made by those who have a house and not backed up with any evidence.

Not all young people are broke, there are plenty out there with good jobs, nice cars and their ‘own’ house (which the bank owns most of still).

 

[IvanDobskey]

500 a month? Bajesus!

Yep, this is pretty much the norm now.

That is considerably more than my mortgage

 

[gazref]

Frothy coffees, avocado toast and now anecdotal mercedes. Is this a sketch show? No amount of "financial education" makes average wages fit into today's housing market.

Stop with the netflix subscription excuses and get onboard with the fact we need to cap rents, build more and make affordable housing to solve the crisis facing young people.

 

[413x]

It's difficult to know from anecdotal evidence.

How many people have an excessive finance car and rent and want to buy and say its too hard.

I can't wrap my head around finance cars as I've never had one.
I guess that's the thing. Once you have one.. How do you get out of it? You get used to that repressed salary. You get used to having a nice car.

The alternative is to downgrade your car is suppose. And you don't have anything to sell to pay for it.
Its a clever trap.

 

[tonys]

We've all been there at one time or another, so this isn't new

 

[413x]

And yeah I know finance can be good for a lot of people. But you don't need a merc when a ford fiesta will do

 

[200sols]

I guess that's the thing. Once you have one.. How do you get out of it? You get used to that repressed salary. You get used to having a nice car.

You get trapped because that is how the system is designed. It has mostly moved to PCPs, so you pay a small lump deposit and then a manageable monthly with a large balloon at the end. Most people cant afford the balloon payment but they can afford the monthly, so they go back to the dealer who happens to be sending them special deals around this time they have a small amount of equity in their existing car which pays the deposit on the new one, the monthly payment increases a bit but is still manageable and that is the cycle.

 

[413x]

You get trapped because that is how the system is designed. It has mostly moved to PCPs, so you pay a small lump deposit and then a manageable monthly with a large balloon at the end. Most people cant afford the balloon payment but they can afford the monthly, so they go back to the dealer who happens to be sending them special deals around this time they have a small amount of equity in their existing car which pays the deposit on the new one, the monthly payment increases a bit but is still manageable and that is the cycle.

When I looked a few months back at electric car scheme it was that initial deposit that put me off.

That deposit + the quite high monthly was just too much for me to stomach. The deposit was as much as (or much more than) my car in many cases!

This balloon payment.. Is that what is needed to buy the car end of lease?


As I've gone from owned outright car to owned outright car in very old cars I've not really had to deal with depreciation either. Indeed one car appreciated. But I do remember how long it took to get my first car. That was a slog. So being able to get one now, I can see the appeal.

Especially when image seems so important now

 

[IvanDobskey]

It's all about image and showing off to the other parents when dropping little Jonny off at school. You can't really do that in an old ford fester

 

[200sols]

This balloon payment.. Is that what is needed to buy the car end of lease?

Yes, they are PCPs though so a bit different to a pure lease where you have no option to purchase. Its a neat setup for the car companies, especially as their finance arm is doing the financing and often a hefty APR, you pay interest on the full value including the balloon payment even though you never pay it down. People can say what they like about coffee and avocados, much money is wasted on cars like this.

 

[IvanDobskey]

I think a lot of people are seduced by this leasing of flashy cars. And of course once they have you, there's no escape. A continuous £500 a month to keep a nice car with no end in sight.

 

[IvanDobskey]

What's all this about avocados then? Not heard that one before

 

[the shadow]

What's all this about avocados then? Not heard that one before

Millionaire tells millennials: if you want a house, stop buying avocado toast

Australian real estate mogul Tim Gurner advised young people to solve their housing woes by putting their ‘$22 a pop’ toast toward a deposit instead

www.theguardian.com

https://twitter.com/i/web/status/864065346516377600

 

[decto]

Frothy coffees, avocado toast and now anecdotal mercedes. Is this a sketch show? No amount of "financial education" makes average wages fit into today's housing market.

Stop with the netflix subscription excuses and get onboard with the fact we need to cap rents, build more and make affordable housing to solve the crisis facing young people.

I am literally quoting conversations from my office.

 

[IvanDobskey]

$22 for avocado on toast

I don't even like avocado

 

[slinxy]

Comparing rates in isolation between countries is largely meaningless. What matters is overall affordability when accounting for average income and living costs, of which interest rates are but a single component; and affordability varies wildly between these countries.

I do however find data like this particularly interesting:

What's the percentage drop rate comparing with?
total of 25-35 year olds in the country or prevous percentage of 25-35 year olds that purchased a house?

In some countries like Germany, France and the US... home ownership comes at a much older age so there's not that many people in that age group that is expecting to purchase a house.
It seems to be a "given" in the UK that everyone should own their own home and that we should start as young as possible.

I didn't buy mine until I was nearly 40 and that's cos I was was kinda forced into to it as I had to leave the place that I was renting for over 6 years. If I didn't, I most likely still be renting it now as I enjoyed the flexibility.

More youngesters are going to university and getting into much more debt now a days... It shocked me how many mature students there were when I was working at collegue compared to when I went to study, let alone university.

 

[the shadow]