Current Affairs Mortgages

[woomy]

I`ve got friends,who don`t even own the clothes on their back mate.

Absolutely everything is either a loan, a lease, a store card and to cap it all off, they have interest only mortgages, golf memberships, fancy gym fees and kids in private schools too.

Their whole life is one big circle of debt, but according to them, living the life was what is was all about, as they jetted off for their fourth foreign holiday of the year, paid for on a card.

It may sound callous, but I don`t have an ounce of sympathy for people who have chosen to live their life this way, as sooner or later, it was always going to come back and bite them.

I get where you are coming from.
People do live above their means. I don't begrudge anybody living a good life. Take your holidays, have the car. Enjoy.
But. You have to do it in a responsible way. The Mrs always goes on at me for being a bit tight. We can afford it, but I don't have the expensive car and I certainly don't pay triple for my underwear just to have some guys name on it.
Upshot is. We are now in a great place to ride this out. Money in the bank, yes it will lose some of its spending power, but we are good to go. It's like I was born for this.

Do feel for those who will likely lose their expensive cars and whatnot. But you have to make sure the foundations are in place first. Then splash out.

 

[larrygobfiend]

14 months until my fixed rate ends. That’s me screwed ?

 

[The binman chronicles]

14 months until my fixed rate ends. That’s me screwed ?

If you can get any sort of half decent deal it might be worth remortgaging now and paying the redemption fee. Paying a couple of grand now is going to be a lot better than tens of thousands in extra interest later.

But always a gamble, with any luck in 14 months time things would have settled down again. I think 2.5% or there abouts is what interest rares should normally be, meaning 3 something % would be reasonable and perhaps not a killer. However they could stall the economy so bad we will be back down to 0.nothing rates again to try and recover.

 

[Ivo]

Our 1.9% fixed rate ends in about a year. Fingers crossed things settle down by then. Will hopefully only have about 30% LTV then and can always overpay in the mean time.

 

[verreauxi]

It is unbelievable how quickly this has increased. I just refinanced last year at a fixed 2.5% and I am thankful I did. This will put a lot of stress on variable rate holders that don't have a cap.

Exactly, I refinanced during COVID to an 18yr fixed rate at like 2.8 or something. I recall my dad telling me that in the mid-70s interest rates were like 16% when I was a kid...at the time, I had no idea what that means, but now when you have a mortgage yourself and see all the $$ simply going to interest it is very depressing.

 

[Eggs]

….finished my mortgage 13 years or so ago but I remember interest rates being at 16%, just hope for you folk we don’t return to those days.

My son is on a fixed rate, my daughter is mortgage free but is looking to sell her current house and is house hunting so the situation is very unstable for her.

Dreadful times, dreadful Government.

 

[Tennessee Blue Mike]

Exactly, I refinanced during COVID to an 18yr fixed rate at like 2.8 or something. I recall my dad telling me that in the mid-70s interest rates were like 16% when I was a kid...at the time, I had no idea what that means, but now when you have a mortgage yourself and see all the $$ simply going to interest it is very depressing.

Yes interest rates in the 70's & early 80's I remember were above 12%. In fact my first mortgage a 30 year fixed was 9.9% I thought 15 years later a 5% was as low as it would go when I refinanced the first time. But I was very happy moving up in square footage and gaining a 2.5% rate just this past year. Unusual for me that I did it in the nick of time too. I usually dither to long and miss the boat.

 

[Bruce Wayne]

Exactly, I refinanced during COVID to an 18yr fixed rate at like 2.8 or something. I recall my dad telling me that in the mid-70s interest rates were like 16% when I was a kid...at the time, I had no idea what that means, but now when you have a mortgage yourself and see all the $$ simply going to interest it is very depressing.

The actual amount borrowed back then was much less though, both in absolute terms and as a percentage of one's income. There's analysis around that suggests that the rates then equate to about 3% interest now for those reasons. If they go to where they're expected to then it would be a lot worse than the mid-70s.

 

[verreauxi]

The actual amount borrowed back then was much less though, both in absolute terms and as a percentage of one's income. There's analysis around that suggests that the rates then equate to about 3% interest now for those reasons. If they go to where they're expected to then it would be a lot worse than the mid-70s.

Ahh yes, that makes good sense. Thanks!

 

[edge]

The actual amount borrowed back then was much less though, both in absolute terms and as a percentage of one's income. There's analysis around that suggests that the rates then equate to about 3% interest now for those reasons. If they go to where they're expected to then it would be a lot worse than the mid-70s.

True mate , I got my married about then , got a 3 bedroom 18 mth old house for £16,700 , because the bottom had fallen out of the market, intrest rates went up ,people were losing there homes everywhere.
Think it was about 14% at the time, it was easy to get the deposit , and there were offers with the mortgage of free legal fees , to get you in as there was no market.
Different to there days with thousands needed to. Get on the ladder.

 

[Bruce Wayne]

True mate , I got my married about then , got a 3 bedroom 18 mth old house for £16,700 , because the bottom had fallen out of the market, intrest rates went up ,people were losing there homes everywhere.
Think it was about 14% at the time, it was easy to get the deposit , and there were offers with the mortgage of free legal fees , to get you in as there was no market.
Different to there days with thousands needed to. Get on the ladder.

Here's the thing with that though mate. Everyone looks at property prices then and property prices now and thinks "holy moly, what an investment", but to put it into perspective, if you'd taken your £16,700 and invested it in the S&P500 index in 1970, by now it would be worth over £3 million. Now I know property prices have gone up a bit, but I reckon your 18-month-old 3-bed isn't going for quite that much.

 

[jerseytoffee]

Got a mortgage up for renewal in early 2024 with our rate at 2.4%. We've just had twins last summer and their nursery care is going to be more than my wifes wages, so we're debating whether she goes back into work or looks after them full time.

It was already going to be tight with the twins here, so hopefully it calms down and the interest rates lower a bit by then or it's going to get really tough for us. Fortunately living in Jersey means our energy bills aren't going up a crazy amount, feel for the families in the mainland who are going to really struggle shortly.

Crazy how a non elected government can be allowed to cause it's population so much trouble.

 

[larrygobfiend]

Great isn’t it? You go to work, get a mortgage, have no other debt, stay out of trouble and you’re still up schit creek without a paddle.

What’s the point?

 

[edge]

Here's the thing with that though mate. Everyone looks at property prices then and property prices now and thinks "holy moly, what an investment", but to put it into perspective, if you'd taken your £16,700 and invested it in the S&P500 index in 1970, by now it would be worth over £3 million. Now I know property prices have gone up a bit, but I reckon your 18-month-old 3-bed isn't going for quite that much.

I don't know mate, gave it up when I got divorced, be about 180k now but i put a big double extension on it before i lelt as well.
That was good timing by me, should have binned her before I got that.
I didn't make a penny off it , because my kids lived in it, and I wouldn't see them suffer, gave it up and walked away(not from my kids ever)
just ended up in a lot of debt
The wages were really low then as well, I was on about a quarter of my current wages.

 

[Sweeneytoad]

My current one is fixed for 2 years at 3.67%. No idea if thats good or not...