When does borrowing more make sense?

HungryHippos said:
No it's worse than that, in negative equity you can't switch to a new deal on favourable times, because you owe more on the mortgage than the house is worth.

So if it's really bad, people can be stuck on the SVR rates, which are fairly punishing.

It's not just a case of waiting for the price to recover before you sell it, you will pay much higher interest rates in the meantime, if you can even afford those (some people probably can't).
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Good point, didn't think of that.
 
MikeTheNative said:
Good point, didn't think of that.
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It's also one of the reasons why I think if that is a concern due to reasonably low equity, then a longer fix with more certainty on monthly payments can be a good thing.

i.e. FTB with 10% deposit going for a 5 year fix probably isn't a bad shout, as long as the 5 year fix isn't too expensive.

Everything has risks though, even that example means you can't take advantage of gaining equity and re-fixing at a better rate, or being stuck paying exit fees if you need to sell and aren't buying another house.
 
There were also thousands of people who were also stuck on really high SVR rates back from the last crash who were unable to change their deal because they no longer meet the general lending criteria after it was tightened up considerably.

What makes it worse is that nearly all of them were able to repay the current mortgage (e.g. not missed a payment) and has done for years but they were failing the new affordability tests on remortgaging to a cheaper deal which would cut repayments significantly. All it does it just cost them even more money in the long run.
 
Marvt74 said:
Really off topic here. But this is the first post of yours i've seen since i thought of asking.

Did you ever make a post about your experience doing the El Camino? I'm reading a book about the PCT and been interested in doing something more accessible.
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think i started a thread but it sort of fizzled out ,was an amazing experiance though and theres a camino forum that is brimming with info ,quite afew decent youtube channels as well ,hard to see how the alburgues will work now though when some are 50 plus people to a room and a bed race going on

( i suppose very slightly on topic as being mortgage debt free helps you to do these things)
 
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