Mortgages, Interest Rates etc
- Thread starter CornishRob
- Start date
Rob,
Who are you getting your mortgage with and is it someone you bank with? FWIW, I don't think interest rates are going to rise much in the next 5 years.
I would be looking for a deal with as much flexibility as possible and leave you about 20% as a flexible amount. ie: if your mortgage payments are £1000 I would make sure you can afford £1250.00. Or if you have that flexibility now, pay £1250 by shortening your term and if rates go up, you can then extend back to the original plan.
I paid off my original mortgage in 7 years. If I would have kept it at the original 15 years, I would have paid almost double in interest charges over the term and at no point in my life could I afford to just give someone £40 - 50K. I didn't miss the £200 or so a month extra I was paying and just lived with slightly less disposable income.
The quicker you get rid of your capital the less interest you pay to the lender. There needs to be flexibility as you never know what life is going to throw at you next, kids, job abroad etc.
H.
Who are you getting your mortgage with and is it someone you bank with? FWIW, I don't think interest rates are going to rise much in the next 5 years.
I would be looking for a deal with as much flexibility as possible and leave you about 20% as a flexible amount. ie: if your mortgage payments are £1000 I would make sure you can afford £1250.00. Or if you have that flexibility now, pay £1250 by shortening your term and if rates go up, you can then extend back to the original plan.
I paid off my original mortgage in 7 years. If I would have kept it at the original 15 years, I would have paid almost double in interest charges over the term and at no point in my life could I afford to just give someone £40 - 50K. I didn't miss the £200 or so a month extra I was paying and just lived with slightly less disposable income.
The quicker you get rid of your capital the less interest you pay to the lender. There needs to be flexibility as you never know what life is going to throw at you next, kids, job abroad etc.
H.
The last time the Tories decided they didn't want to stay in Europe this happened;
http://news.bbc.co.uk/onthisday/hi/dates/stories/september/16/newsid_2519000/2519013.stm
I wouldn't bet on interest rates if we're letting the great un-washed decide if we should stay in Europe or not !
:thumbsdown:
http://news.bbc.co.uk/onthisday/hi/dates/stories/september/16/newsid_2519000/2519013.stm
I wouldn't bet on interest rates if we're letting the great un-washed decide if we should stay in Europe or not !
:thumbsdown:
Aye the *ankers have learnt all sorts of new ways to screw their customersHavard said:Jasey said:
I think lessons have been learned since then (although some other mistakes have been made on immigration, benefits and NHS etc), however, I don't think we will see the likes of 15% again.
If it does then I am going to become a lender....
H.
Becoming one might be the answer
Paulwirral
Active member
Jasey said:Last time I had a house in London (90's) my Mortgage was £100k and interest rates were 4 or 5 % monthly payments approx £600 pcm.
I was working / living in Aberdeen at the time so had a tenant in basically covering the mortgage (just).
Then interest rates went to 13% odd and my payments went to £1,300 pcm and the rent stayed the same.
Was like that for best part of a year before I could sell as negative equity had taken hold !
Have been very careful ever since and always try to keep as low a mortgage as possible !
find an online calculator and see what effect rate rises have on your payments before deciding anything
I'm pleased I'm not the only one who experienced 13 - 14 per cent rates , if I tell my younger mates the rates were that high they think I'm taking the piss
If you want to give them another laugh tot up all the tax you've paid in your life and ask them to guess how much.Paulwirral said:Jasey said:Last time I had a house in London (90's) my Mortgage was £100k and interest rates were 4 or 5 % monthly payments approx £600 pcm.
I was working / living in Aberdeen at the time so had a tenant in basically covering the mortgage (just).
Then interest rates went to 13% odd and my payments went to £1,300 pcm and the rent stayed the same.
Was like that for best part of a year before I could sell as negative equity had taken hold !
Have been very careful ever since and always try to keep as low a mortgage as possible !
find an online calculator and see what effect rate rises have on your payments before deciding anything
I'm pleased I'm not the only one who experienced 13 - 14 per cent rates , if I tell my younger mates the rates were that high they think I'm taking the piss
Two of the boys in the office guessed I had paid £15k in tax in 30 years or working !
Not sure they believe me when I told them the true amount
.In a similar position too having just taken the plunge on a scary mortgage for a house in London... having spent the last couple of years watching prices go up and up I decided it was time to just go for it and was lucky enough to be able to push to 70% LTV which means I've got a great rate of 1.7% on a 2 year fix for now. Ultimately like most people I'm counting on a.) rates staying low for at least a few more years (certainly long enough for the remortgage in 2 years) b.) a payrise or two over the same period, c.) that the music doesn't stop and lead to an almighty crash which leaves me stuck in the house forever (very happy with it now but it's not a 'forever house').
It really is so tough buying anything in London at the moment... felt fairly sick when I discovered the previous owner paid £18k! In my line of work London is really where its at so can't realistically look to relocate elsewhere either. Worth noting that under their 'stress tests' the banks generally only need to be capitalised to take the losses that would arise from a 30% crash. Any more than that and really it would become the banks' problem and they would have to be very accommodating to their borrowers - they certainly won't get bailed out again.
It really is so tough buying anything in London at the moment... felt fairly sick when I discovered the previous owner paid £18k! In my line of work London is really where its at so can't realistically look to relocate elsewhere either. Worth noting that under their 'stress tests' the banks generally only need to be capitalised to take the losses that would arise from a 30% crash. Any more than that and really it would become the banks' problem and they would have to be very accommodating to their borrowers - they certainly won't get bailed out again.
jampudding
Member
I don't have much advice re types of mortgages but I would say remain fully leveraged - don't overpay a mortgage just get more debt that pays itself (however you choose to do that). Capital gains always outstrip any other saving you think you might be enjoying in the long term.
CornishRob
Senior member
Thanks for all the info Chaps.
Didn't get the house I was negotiating on. I went close to the asking price, which was over what I wanted to pay, but still didn't get it. Disappointed!! Looking at another tonight which is slightly cheaper, but on a bit busier road, but is a nicer house. Needs all new windows etc though!
The London area is a joke. I was back in Cornwall at the weekend and I could have purchased a 4 bed farmhouse for the amount we are looking at here.
The mortgage I have is not with my bank, its with Halifax, and was found through a independent mortgage broker (Not through bank or estate agent) He has been very good actually!
I will definitely be m making as many over payments as I can, which is upto 10% a year of mortgage according to mortgage docs. I wouldn't be making that much at this point in time anyway.
Didn't get the house I was negotiating on. I went close to the asking price, which was over what I wanted to pay, but still didn't get it. Disappointed!! Looking at another tonight which is slightly cheaper, but on a bit busier road, but is a nicer house. Needs all new windows etc though!
The London area is a joke. I was back in Cornwall at the weekend and I could have purchased a 4 bed farmhouse for the amount we are looking at here.
The mortgage I have is not with my bank, its with Halifax, and was found through a independent mortgage broker (Not through bank or estate agent) He has been very good actually!
I will definitely be m making as many over payments as I can, which is upto 10% a year of mortgage according to mortgage docs. I wouldn't be making that much at this point in time anyway.
Familiar scenario.
Bought my place in Zone 3, 4 years ago and paid more than I wanted to spend but for the right location and property. Deposit of around 20% after saving pre-recession and failing to get on the ladder then (luckily).
Now I have a better place thats increased in value by 50% since it was bought. Yep, the payments are high but am halfway through a 5 year fixed repayment at 3.2% (Newcastle Building Society) and if the worst ever happened we'd simply sell, cash in our chips and move elsewhere with a tiny mortgage.
My advice to any potential buyers is identify where you should invest (after all, most first properties in London are to a certain extent investments, not homes for life) get on when you can, don't be surprised if you're paying 10-20% more than you budgeted for for the right place and always shop around for mortgages with an eye on what interest rates are doing mid to long term. Overpayments are a good idea if you can get a mortgage that allows without penalty, as is the option for mortgage 'holidays' should you wish to upgrade anything.
London is a strange area and back home in Suffolk I could live like a king for the same money our two bed flat is worth. But thats the way it is so we all have to just get on with it.
Bought my place in Zone 3, 4 years ago and paid more than I wanted to spend but for the right location and property. Deposit of around 20% after saving pre-recession and failing to get on the ladder then (luckily).
Now I have a better place thats increased in value by 50% since it was bought. Yep, the payments are high but am halfway through a 5 year fixed repayment at 3.2% (Newcastle Building Society) and if the worst ever happened we'd simply sell, cash in our chips and move elsewhere with a tiny mortgage.
My advice to any potential buyers is identify where you should invest (after all, most first properties in London are to a certain extent investments, not homes for life) get on when you can, don't be surprised if you're paying 10-20% more than you budgeted for for the right place and always shop around for mortgages with an eye on what interest rates are doing mid to long term. Overpayments are a good idea if you can get a mortgage that allows without penalty, as is the option for mortgage 'holidays' should you wish to upgrade anything.
London is a strange area and back home in Suffolk I could live like a king for the same money our two bed flat is worth. But thats the way it is so we all have to just get on with it.