Mortgage Rate Rises

[413x]

Since 2010 our house value has gone up 60-70%. Bloody madness and we do not even live in a London commuter zone but I think a lot of WFH have moved this way for cleaner living. We were looking to sell during covid and houses were barely up for a couple of weeks before selling. Now there is very little for sale.

It wouldn't surprise me in the decades to come if WFH really does take off that a lot of previously hot property will be worth a lot less than it was and people stuck in rubbish houses with negative equity.

And so much of that is the last couple of years. Ridiculous.

Rate houses are rising, if you discount any potential near term crash I'd say undesirable properties probably won't lose value. But won't keep up with the desirable ones.

I do wonder if our garden now adds more to the value of this house than it did before. I certainly value it higher at a personal level than what a garden used to add.

 

[NotAGolf]

Question to those talking about taking out a longer mortgage term... What is the max age banks are willing to go to currently (roughly)?

Is it an arbitrary age cutoff, or is it more tied to affordability (e.g. assuming a pension won't cover mortgage payments)?

When we first moved in, we took a longer term and overpaid each month to effectively bring the term down to want we wanted, but just with a bit of an extra safety blanket that we could 'save' a couple of hundred each month in an emergency (like someone else mentioned previously).

We're 35 now and I assumed we wouldn't be able to get anything longer than 25 years, but maybe that's no longer the case.

 

[dlockers]

Question to those talking about taking out a longer mortgage term... What is the max age banks are willing to go to currently (roughly)?

Is it an arbitrary age cutoff, or is it more tied to affordability (e.g. assuming a pension won't cover mortgage payments)?

When we first moved in, we took a longer term and overpaid each month to effectively bring the term down to want we wanted, but just with a bit of an extra safety blanket that we could 'save' a couple of hundred each month in an emergency (like someone else mentioned previously).

We're 35 now and I assumed we wouldn't be able to get anything longer than 25 years, but maybe that's no longer the case.

IIRC a lot of the banks apply black & white - i.e. whatever you input as your retirement age.

It can be up to 67 with no question right? So theoretically 67 minus the term = 32y/o for a 35 year mortgage.

 

[danlightbulb]

Question to those talking about taking out a longer mortgage term... What is the max age banks are willing to go to currently (roughly)?

My 30 year mortgage Ive just taken out takes me to age 72, I had no questions about it. That was with Santander.

 

[D.P.]

my 100 year mortgage will require serious medical breakthroughs

 

[MikeTheNative]

Don't worry guys, in 30 years there will not be a retirement age.................

 

[Hodders]

my 100 year mortgage will require serious medical breakthroughs

You could always try the Bank of Transylvania. They do great long term mortgages.

 

[Uther]

Don't worry guys, in 30 years there will not be a retirement age.................

There isn't one now. You can retire whenever you want to if you can afford it, or you can keep working until you drop.

 

[Mercenary Keyboard Warrior]

This

There is no retirement age just an age that the state pension becomes payable

I suspect as long as you stick with you end date being below the average life expectancy in the UK you will be fine.

I would love to know what % pay off their mortgage early, I bet its actually quite a high percentage.
I know loads that have, changes in circumstances (earning more), deciding to use savings, inheritance, downsizing etc etc it happens far more frequently that people think.

Its hard to imagine when its relatively new, your wages haven't moved etc. As time goes by wages should increase (they do), your life will change and for most it becomes a possibilty.
Even if its only a few years early, I bet most people face the prospect of reducing the term over the life of the mortgage

 

[MikeTheNative]

There isn't one now. You can retire whenever you want to if you can afford it, or you can keep working until you drop.

I don't think there's going to be state pension like there is now in 30 years. Either you retire off your private or keep working with help UC.

 

[MikeTheNative]

This

There is no retirement age just an age that the state pension becomes payable

I suspect as long as you stick with you end date being below the average life expectancy in the UK you will be fine.

I would love to know what % pay off their mortgage early, I bet its actually quite a high percentage.
I know loads that have, changes in circumstances (earning more), deciding to use savings, inheritance, downsizing etc etc it happens far more frequently that people think.

Its hard to imagine when its relatively new, your wages haven't moved etc. As time goes by wages should increase (they do), your life will change and for most it becomes a possibilty.
Even if its only a few years early, I bet most people face the prospect of reducing the term over the life of the mortgage

I think your missing the fact though that currently house prices to wages is the worst it's ever been. People buying later in life now than before adding to the 25+ term length that's pretty normal. Most people will be getting close to 65 when their mortgage ends.

 

[McBain]

Question to those talking about taking out a longer mortgage term... What is the max age banks are willing to go to currently (roughly)?

Is it an arbitrary age cutoff, or is it more tied to affordability (e.g. assuming a pension won't cover mortgage payments)?

When we first moved in, we took a longer term and overpaid each month to effectively bring the term down to want we wanted, but just with a bit of an extra safety blanket that we could 'save' a couple of hundred each month in an emergency (like someone else mentioned previously).

We're 35 now and I assumed we wouldn't be able to get anything longer than 25 years, but maybe that's no longer the case.

Im 40 and was offered a 30 year mortgage fairly recently, I decided not to move in the end. I figure retirement age for me will be well into the 70s if I make it.

Working to the grave, got to love it.

 

[Uther]

I don't think there's going to be state pension like there is now in 30 years. Either you retire off your private or keep working with help UC.

State pension is basically a top up or even pocket money to your own pension, good luck to anyone trying to survive on it.

 

[Mercenary Keyboard Warrior]

I think your missing the fact though that currently house prices to wages is the worst it's ever been. People buying later in life now than before adding to the 25+ term length that's pretty normal. Most people will be getting close to 65 when their mortgage ends.

I'm not missing anything, the longer term the more time will erode the initial borrowing due to inflation.

If was taking a long mortgage out now I would be putting a small amount, token, increase a bit over time as possible, into a S&S tracker.
Compounding that from now until say 20 years time, and pulling the money out when its on a high would probably take a massive amount out of a say 35 year mortgage 20 years in.

 

[danlightbulb]

If was taking a long mortgage out now I would be putting a small amount, token, increase a bit over time as possible, into a S&S tracker.
Compounding that from now until say 20 years time, and pulling the money out when its on a high would probably take a massive amount out of a say 35 year mortgage 20 years in.

How much would you say is needed on a £225k mortgage to make a decent dent in 20 years?

 

[BUDFORCE]

Question to those talking about taking out a longer mortgage term... What is the max age banks are willing to go to currently (roughly)?

Is it an arbitrary age cutoff, or is it more tied to affordability (e.g. assuming a pension won't cover mortgage payments)?

When we first moved in, we took a longer term and overpaid each month to effectively bring the term down to want we wanted, but just with a bit of an extra safety blanket that we could 'save' a couple of hundred each month in an emergency (like someone else mentioned previously).

We're 35 now and I assumed we wouldn't be able to get anything longer than 25 years, but maybe that's no longer the case.

Hi, a bit out of touch with residential lending, but I don't believe there have been any fundamental changes and this is pretty standard regulation following MMR back from whenever.

If you apply for the mortgage within 10 years of retirement, it's a pain in the arse, the lender needs to base affordability on your pension income and current income (whatever is the lower of the two) and will almost always be the pension income.

So the lender needs to try and calculate what you will be earning, when you retire, and you'll have to prove it, bloody nightmare.

Outside of ten years they just go with your current income, and whatever you declare as your retirement age.

So if you are 40 years old, apply for a 35 year term, to age 75, you 'declare" you will retire at 75, it's basically a given.

If you are employed as a bricklayer or other manual job they may question it.

Most lenders will go to 75, some more specialist lender go higher, I think it was Family Building Society go up to 95 or something like that, and that's a standard mortgage not one of these equity release jobs.

 

[Scam]

If was taking a long mortgage out now I would be putting a small amount, token, increase a bit over time as possible, into a S&S tracker.
Compounding that from now until say 20 years time, and pulling the money out when its on a high would probably take a massive amount out of a say 35 year mortgage 20 years in.

Then again, compound interest on your mortgage payments works the other way. Any overpayments we make affect our interest from the day we make them so it's worth drip feeding say £400/month into it rather than waiting to put a lump sum in every few months. I'd always be inclined to overpay a mortgage when there's spare cash but I know many disagree. I guess a bit of both is ideal.

 

[adam cool dude]

Question to those talking about taking out a longer mortgage term... What is the max age banks are willing to go to currently (roughly)?

Is it an arbitrary age cutoff, or is it more tied to affordability (e.g. assuming a pension won't cover mortgage payments)?

When we first moved in, we took a longer term and overpaid each month to effectively bring the term down to want we wanted, but just with a bit of an extra safety blanket that we could 'save' a couple of hundred each month in an emergency (like someone else mentioned previously).

We're 35 now and I assumed we wouldn't be able to get anything longer than 25 years, but maybe that's no longer the case.

I am 35 and banks were going to give us 200K mortgage when we were looking to move last year to a bigger house. They offered us up to 35 years which would have been 69 at the time. We had 200K in our house as capital though.

We decided against it in the end as I completely changed careers. Seems like a good thing now with the cost of living.

It is a stark contrast to when we were buying 2010 when you needed to put down 25% to get anything remotely decent!

 

[dlockers]

Then again, compound interest on your mortgage payments works the other way. Any overpayments we make affect our interest from the day we make them so it's worth drip feeding say £400/month into it rather than waiting to put a lump sum in every few months. I'd always be inclined to overpay a mortgage when there's spare cash but I know many disagree. I guess a bit of both is ideal.

All of those people were posting at the height of a "everyone wins" bear market. Mud on many of their face now IMO.

 

[HangTime]

I didn't really see the point of a 2 year or 3 year fix, the rates weren't too different anyway and you then have the extra faff of getting a new mortgage every 2 or 3 years + paying a fee etc..

Agreed, I think people often overlook the overhead of fees when taking short term fixes. Paying a fee for a 10yr fix isn't that bad if it's the only fee you pay in 10 years, but paying say £999 for a 2 year fix (likely followed by another fee 2 years later) only makes sense if you are borrowing a large amount (and hence there's a big offset from reduced interest payments).