Soldato
Surely at that much left you'd be better off getting say a personal loan for £10k and just using that to pay it off?
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Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Id get myself a 0pc purchase credit card and buy everything on it and just put everything I'd put in the CC onto the mortgage to get it cleared
Then once get the mortgage gone I'd pay off the CC at same rate eat paying off the mortgage.
There's a few 19-24 month 0pc deals around now
When you're putting food and petrol and insurance you can accrue 1000s fairly quickly
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Negligible tbh, the rate wouldn't be that much different for such a small loan.
Part of the reason I cba to change mortgage product is I'm renting the house out and it's on a personal mortgage (with permission) and I don't want to rock the boat.
I was surprised to hear my in-laws are on a similar really high rate. Like you said though, it didn't make a huge difference given the low amount left.I wonder if I'm on the highest rate around here at 7.24% SVR
Due to circumstances I cba with the hassle of getting a new mortgage product and tbh, since there's less than 10K left, it's only risen by £20pm from the start of all this. Which I think also goes to put in perspective when 'the older generation' go on about the high rates of the 80's, but don't take into account it was on much lower amounts and how much more sensitive mortgages are now to interest rate rises.
yep, stoozing is a thing now that rates are better...not as impressive as before, but free money nonetheless
all about it on the credit card thread
I have a looooot on credit cards. All at 0pc.
They keep giving them to me too.
I think my total credit limit is 78k I only earn 55 ffs
(FYI, I'm not using 78k of credit!)
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if only i could put my mortgage payment on my credit card lol
At 78k..i could put 1/3 of my mortgage on it!
More like 2/5 actually!
I just applied for another as I saw a nice 20 month 0pc on purchases. Asked for 4k and got an 8k limit. Already have 10k limit on another card with the same lender.
Honestly.. It seems. Ridiculous to me to lend someone 20k more than their salary!
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Yes the amount was lower and so were wages but the interest rate went up immediately for most due to there being few other options apart from the variable rate. That is why you now have the help and support that we didn't.I wonder if I'm on the highest rate around here at 7.24% SVR
Due to circumstances I cba with the hassle of getting a new mortgage product and tbh, since there's less than 10K left, it's only risen by £20pm from the start of all this. Which I think also goes to put in perspective when 'the older generation' go on about the high rates of the 80's, but don't take into account it was on much lower amounts and how much more sensitive mortgages are now to interest rate rises.
We've been through this and the data is in.
In affordibility comparisons, the rates of today already exceeed those of the 80's and most of the help around now is to buy a house (because they are far more unaffordable in comparison to yesteryear), not help once you've got it. And there were other types of support back in the day, MIRAS being one of them.
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Try telling that to people that lost their houses due to not being able to afford it for the same reasons we have now. The fixed mortgages do not have an immediate affect on your finances the way that a variable one does. Now that rates have increased the effect is being felt by those who are having to get another mortgage. My daughter and her partners mortgage payment has nearly doubled this year but luckily are managing.We were basically told to just pay the mortgage and nothing else.
Statistics don't show real life though.
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I'm unsure how a mortgage payment can double.
Wasn't the best about 1pc and the worst about 5pc?
Keeping hearing "my rate has doubled".
But I know for me it would be bad. But it would only go up 50pc going to 5ish pc now
It went from £400 /mth to £800 /mth
But to get from. 400 to 800 the percentage would surely have to be huge waaaay over 5pc?
I can't figure that one out
Edit
Unless the term is really really long? Like 30-40 years?
Edit 2
Or some extreme percentage rate like 8pc?
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Soldato
No it's very easy to see how it can double or more.
£100K balance will eat around £1K interest per year, or £83 extra per month for every 1% movement in the rate.
So if you have a mortgage that is say £300K, and your headline rate goes up by 4% more than you were paying before, you suddenly have to pay a bunch more cash.
£300K @ 1% interest for a year = £3000 interest per year (£250 per month).
£300K @ 5% interest for a year = £15000 interest per year (£1250 per month).
This is probably simplifying too much and isn't taking into account that you will reduce the balance at all etc, but you get the idea. Figures really scale out of control when you have a large mortgage AND a high interest rate.
£100K balance will eat around £1K interest per year, or £83 extra per month for every 1% movement in the rate.
So if you have a mortgage that is say £300K, and your headline rate goes up by 4% more than you were paying before, you suddenly have to pay a bunch more cash.
£300K @ 1% interest for a year = £3000 interest per year (£250 per month).
£300K @ 5% interest for a year = £15000 interest per year (£1250 per month).
This is probably simplifying too much and isn't taking into account that you will reduce the balance at all etc, but you get the idea. Figures really scale out of control when you have a large mortgage AND a high interest rate.
When I put in 300k mortgage
20 year term
5 year fix
Mortgage 1 = 1pc
Mortgage 2 = 5pc
Monthly payments come out as
Mortgage 1 = 1378
Mortgage 2 = 1980
Cost over full term
Mortgage 1= 330k
Mortgage 2 = 475k
None of those figures are 2x?
Soldato
Obviously interest only mortgages will be severely affected by the rate rises, I wonder if it's those people that are getting the missive increases?
Must be. I can't see any scenario apart from edge cases where a mortgage would *2 in its monthly cost.
You have to have an extreme rate change and a extreme term. Unless I'm miscalculated.
Soldato
The capital repayment element would be lower initially if the rate goes up. I.e the proportion of interest Vs capital repayment in the mortgage repayment changes.
If you put in interest only mortgage you'll see a linear scaling when you increase the rate.