I don't think so. But it's so far away it's basically unpredictable
Mortgage Rate Rises
- Thread starter glenimp617
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I don't think so. But it's so far away it's basically unpredictable
Soldato
4% average growth a year doesn’t seem so crazy
Soldato
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I'm 6 months out with Natwest. Currently on 2.14%, I've chosen to port to 4.79% fixed for 5 years, no fees. If their rates drop befor 1st november i'll be able to move to the lower rate. Fortunately my monthly payment isn't changing much.
Man of Honour
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Ok, hear me out.
Our mortgage rate is due to increase from the current tiny 1% to whatever NatWests 2 years fixed will be. 5% or the like. Monthly payment goes up about £500-600.
Our main house is only used while we work, we’ll sell up when we retire, there’s easily half a million cash in it. 30% mortgage or so, a bit less I think.
Our holiday home is mortgage free and where we’d eventually retire to.
Eventually, probably not too far away, I stand to inherit a lot of money that pays the mortgage many times over, even if I don’t, I wouldn’t struggle to pay it off down the line.
So with that in mind I’m really tempted to extend the mortgage term so that we don’t end up any worse off month to month while we’re young and can enjoy life. I’m crazy right?
Probably no pay rise this year.
Our mortgage rate is due to increase from the current tiny 1% to whatever NatWests 2 years fixed will be. 5% or the like. Monthly payment goes up about £500-600.
Our main house is only used while we work, we’ll sell up when we retire, there’s easily half a million cash in it. 30% mortgage or so, a bit less I think.
Our holiday home is mortgage free and where we’d eventually retire to.
Eventually, probably not too far away, I stand to inherit a lot of money that pays the mortgage many times over, even if I don’t, I wouldn’t struggle to pay it off down the line.
So with that in mind I’m really tempted to extend the mortgage term so that we don’t end up any worse off month to month while we’re young and can enjoy life. I’m crazy right?
Probably no pay rise this year.
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Na, whack it out. I've done a similar thing - basis I am young/expecting further progression (no major windfalls unfortunately
).
Associate
Not crazy. Re-maximising your mortgage & mortgage term constantly as you move throughout life, whilst simultaneously doing other things like investing, growing you pension etc, can actually be financially sound & leave you better off.
I was thinking the same thing. Just got on the ladder 3/4 years ago on a 30 year term. When we remortgage, I'll probably ask for another 30 year term to minimize the monthly payment increases but still over pay as much as I can during that term.
Only issue is that a 30 year term does take me into my 70s :O so not sure banks will approve of it?
Only issue is that a 30 year term does take me into my 70s :O so not sure banks will approve of it?
Associate
I was told that the maximum term I could get without a further credit check was until the age of 70
Yeah I don't believe in crippling yourself when you're young just to be "mortgage free" myself.
Associate
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You’d only get run over by a bus the day after you paid it off…
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^ this
I was told I can go way further but without any further paperwork, 70 was max age.
So many variables though.
If you add up the interest you end up paying during your life having a long mortgage the whole time, its likely eye watering. I mean even people with fairly average or modest mortages are now looking at likely over £10k going *poof* every year just in interest.
Its a tricky one and i can see the argument for both sets of thinking.
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Too much chance of dying young or not having the health to do anything when you're old.
Worst for me would be to either get news of a terminal disease or becomes paralysed or something just as you retire but you've done nothing as all you've done is invest and save
Soldato
Yup.
You gotta have balance, I mean going to other way isn't a good idea either, blow all your money take up drugs and drinking hard, or whatever.
But the opposite is equally as bad, it's about balance.
Steve Tyler sang it on one of Aerosmith's song - "lifes a journey, not a destination"
For sure.
Before I was "save save save".
But having seen someone pass away suddenly not long into retirement, and the prevalence increasing in that sort of thing I've switched to a more balanced approach.
I also want to keep my mortgage payments the same. If that means extending.. So be it.
Had this with parents and in laws. Parents always rented and became council renters, yes they did struggle at times but went to Germany and America (family out there) both lived past 90 with the minds intact. In laws had owned outright from early on in their marriage but after in law spent most of the income on ciggies and tools. Never really went anywhere. Father in law died just before 9/11 aged 70 and mother in law at 84 after getting dementia.
My partners mum past away last year at 67. First death I've really experienced in that generation.
I distinctly remember her dad saying "we had all these plans".
They were quite well Off and it came out of the blue. Ie no time to make most of what's left.
Man of Honour
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I’ve always got in the back of my mind my dad who saved for his retirement, then ended up with a heart attack and stroke and basically sits in his chair all day unable to do much.
Associate
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Budget against the monthly payment, not the total balance.
Live life.
Live life.
Man of Honour
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I guess this is the only thing in the back of my mind. Then again, it’s kind of moot by the time I’m later in life.
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