I think relationships are on the decline. So more people are struggling to get on the ladder as 2 people are needed.
Mortgage Rate Rises
- Thread starter glenimp617
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I think relationships are on the decline. So more people are struggling to get on the ladder as 2 people are needed.
Soldato
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prices then have to come down if big enough chunks of buyers are single people, or there needs to be houses for them. i know all my single friends have bought cheaper small mid terreced properties , or there needs to be some government help for single buyers but then that just continues to push house prices up
Probably longer and longer mortgages.
Whatever it takes to keep house prices high.
Don't think we will see much house price growth now. Not with our stagnant wages.
I guess the unknown is what will the wealth pass down look like?
The single people i know not on big wages are simply getting in to the shared ownership game, so you pay a rent on top of mortgage. So House prices just seem to be kept even higher than before due to it (new builds)
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Yeah another scheme to keep the gravy pouring
Soldato
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Can someone in the know explain to me which is better or if no real noticeable difference.
Our mortgage was a 25 year term.
We did 5 years, but at the time of renewal was the height of the interest rate jumps, so we went from 2.34 to 5.4 something.
I guess we decided to put our length back to 25 years.
So now we have 23 years left with renewal looking approx £1245 per month
I'd like to get back in track, so renew in Feb next year with 18 years left.
But this jumps out repayments to £1465.
The thing is no matter the renewal we will be paying £1600 per month as we have always done. And then any extra lump over payments where we can.
My question is, does it make much of a difference to have 23 left or 18? In terms of overall costs.
It's unlikely we will see to any where close to 18 years before the mortgage is paid in full any way. Ideally 10-13 years and it's gone.
I do like though with 23 years it means should something terrible happen, we can drop to just £1245 paying per month.
Also, would anyone able to tell me how I cna work out how much of the repayment figure going to to interest and how much to the mortgage? None of the comparison sites seem to divulge this in a place I can find
Our mortgage was a 25 year term.
We did 5 years, but at the time of renewal was the height of the interest rate jumps, so we went from 2.34 to 5.4 something.
I guess we decided to put our length back to 25 years.
So now we have 23 years left with renewal looking approx £1245 per month
I'd like to get back in track, so renew in Feb next year with 18 years left.
But this jumps out repayments to £1465.
The thing is no matter the renewal we will be paying £1600 per month as we have always done. And then any extra lump over payments where we can.
My question is, does it make much of a difference to have 23 left or 18? In terms of overall costs.
It's unlikely we will see to any where close to 18 years before the mortgage is paid in full any way. Ideally 10-13 years and it's gone.
I do like though with 23 years it means should something terrible happen, we can drop to just £1245 paying per month.
Also, would anyone able to tell me how I cna work out how much of the repayment figure going to to interest and how much to the mortgage? None of the comparison sites seem to divulge this in a place I can find
Money saving expert has a mortgage calculator.
Bear in mind that most mortgages only allow you to overpay 10% of the balance per year fee free so the lower your balance, the lower the amount you can overpay. You may have to make lump sum payments between re-mortgaging as your balance gets lower.
Bear in mind that most mortgages only allow you to overpay 10% of the balance per year fee free so the lower your balance, the lower the amount you can overpay. You may have to make lump sum payments between re-mortgaging as your balance gets lower.
Soldato
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Yeah thanks I'm aware about the overpayments limit . Once it's below £200k making overpayments to the max 10 percent is much more achievable and likely to happen, which is why (without moving or a big change in circumstances) I estimate 10 to 13 years done
Money saving calculator seems to show interest saved, but I guess it's hard to fully know the savings when I don't know exactly what I'll over pay.
But I see we'd save like £30k by going back to 18 years and doing nothing extra.
So just to know how to find out what my repayments are made of, how much interest and how much is mortgage
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This bit is pretty simple. The amount of interest you're paying is however much you owe * your interest rate. Anything above that reduces the principal. From that point of view, given the same interest rate then your term length isn't that relevant if you keep your payment at a constant value higher than your required monthly payment. Just make sure you don't trigger overpayment penalties.
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Soldato
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We owe about £232k and looking like interest rate of 3.68
The term length is not that relevant. You could keep renewing every 2 years each time making it a 30 year term if your provider would allow it and you didn't reach past 65 or 70 years old. Once it goes beyond a certain age there is risk that you may die or not be employed and would not be able to pay it back.
This is a tactic some people do to minimize the monthly mandatory payment commitments, but top it up...a lot. Gives flexibility in case you become unemployed allowing you to ride the storm out for example, but requires discipline to overpay.
On the negative side, it does mean paying interest for longer if you don't make over payments.
To simplify...the quicker you pay more off, the better. There isn't much point in shortening the term as you lose flexibility where you can overpay instead. However, if you intend to overpay more than 10% a year, you will face penalty erc fees. So just do the maths.
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Oversimplifying because interest is usually calculated daily and the exact amount depends on number the of days in each repayment period but very roughly (232,000*0.0368)/12=£711 interest for the first month of the term. Any amount above that is capital repayment.
We used remortgaging so the new mortgage had a lump sum of savings to reduce the capital amount (more than overpayments).
Couldn't decide what do to with the £8k I saved last year, whether I should invest it, top up my savings ISA, but in the end I overpaid my mortgage £6k so that once I've made my regular January payment, I should be under £100k balance (4.64%). Feels like a good milestone for a £235k flat bought in 2015. I'll be remortgaging in Feb, hopefully on sub 4%, and aim to pay it off within 8-10 years, assuming I don't move up to a house.
Soldato
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We just updated our renewal and ended up with 3.89% for 2 years.
Soldato
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Anyone's guess. But people expect so, without some major event happening in the world
Depends on Rachels predictions but apparently the windfall tax on oil extraction is down 60%.
Just been looking at the sums… I have 25 payments left on my current deal at 4.01%
If the rates say as they are at around 5%, I’ll be paying around 1k of interest per year for 5 years on the remaining ~50k, so I tempted to liquidate and pay off my mortgage.
If it’s around 4%, I’ll probably take a 5 year mortage to pay off the remainder.
If I can get a fix rate of sub 3% for 10 years, I will take that; half my mortgage repayments and put the other half in the stock market.
If the rates say as they are at around 5%, I’ll be paying around 1k of interest per year for 5 years on the remaining ~50k, so I tempted to liquidate and pay off my mortgage.
If it’s around 4%, I’ll probably take a 5 year mortage to pay off the remainder.
If I can get a fix rate of sub 3% for 10 years, I will take that; half my mortgage repayments and put the other half in the stock market.
No, there needs to be a complete removal of schemes to help people afford houses. They need to remove right to buy completely and they need to link council house rent to the ability of the occupant to pay. They need to incentivise people in houses that are too big for them to downsize and they need to make moving house easier and frictionless along with massive house building.
Everything they do that helps people buy simply pushes up prices and benefits one group at the cost of another. ie the future generations.
I would be astonished if you can fix for under 3% unless we had 3+ years of 2% rates and thats not going to happen in the next 2 years
