Mortgage Rates

[Pocster]

33 minutes ago, SteamyTea said:

What is that actually telling us?

That they think a very serious crash is coming (if the borrower defaults then, I think, the lender has to step in and collect rent).

If a serious crash does come, landlords will loose their customers as they will be buying.

 

Going to be interesting.

No one can predict the future, but lenders are "preparing" for certain........

 

What the general public don't realise is how greedy the lenders are with their "fee's" - it's close to extortion .....

[SteamyTea]

13 minutes ago, Pocster said:

hat the general public don't realise is how greedy the lenders are with their "fee's" - it's close to extortion

Makes me wonder if there is a market for a simple, repayment load, say half a % above BoE base rate.

Variable, so not fixed, no set up fees.  Say a fixed period of 25 years.

Oh hang on.

Maybe an insurance backed loan, borrower just pays the interest and the lender takes a small payment to invest wisely.  When maturity comes, the lender cashes in and pays of the loan.

Oh hang on.

[Pocster]

Just now, SteamyTea said:

Makes me wonder if there is a market for a simple, repayment load, say half a % above BoE base rate.

Variable, so not fixed, no set up fees.  Say a fixed period of 25 years.

Oh hang on.

Maybe an insurance backed loan, borrower just pays the interest and the lender takes a small payment to invest wisely.  When maturity comes, the lender cashes in and pays of the loan.

Oh hang on.

Generation load . Parents die , child takes over , they die etc etc 

The infinite loan ! 

[SteamyTea]

3 minutes ago, Pocster said:

Generation load . Parents die , child takes over , they die etc etc 

The infinite loan ! 

Kind of going back to the 19^th Century that.

Some on here will like that, what they voted to leave the EU for.

Bring on the childhood illnesses.

[Pocster]

Just now, SteamyTea said:

Kind of going back to the 19^th Century that.

Some on here will like that, what they voted to leave the EU for.

Bring on the childhood illnesses.

Yeah I know. Lenders would love it though!. Isn't the country going back to the 19th century anyway?

[SteamyTea]

51 minutes ago, Pocster said:

Isn't the country going back to the 19th century anyway?

1660 and after would be more fun.

https://youtu.be/hVWEaxiRmAo

 

 

[Adsibob]

2 hours ago, SteamyTea said:

a simple, repayment load, say half a % above BoE base rate.

Variable, so not fixed, no set up fees.  Say a fixed period of 25 years.

This already exists and has existed for ages. I had such a mortgage with Santander a few years ago. It was a tracker with no break fees. Handy as I didn’t know how long it was going to take to sell the property, but I still needed a mortgage until the sale went through.

[Marvin]

2 hours ago, SteamyTea said:

borrower just pays the interest and the lender takes a small payment to invest wisely.  When maturity comes, the lender cashes in and pays of the loan.

As I guess you know @SteamyTea the problems with what was called "low cost endowment mortgages" was that you only ever paid the interest off so the sum borrowed never became any smaller, and the "endowment" element relied on investment in the stock market. The usual result was that you paid more over the life of the mortgage even if the mortgage was paid off by the investment element. 

 

A typical mortgage usually costs 2.8 times the original loan, a low cost endowment about 3.8.

 

Good luck

 

Marvin

[Marvin]

2 hours ago, Pocster said:

Yeah I know. Lenders would love it though!. Isn't the country going back to the 19th century anyway?

I think to the 1920's or worse.

[SteamyTea]

38 minutes ago, Adsibob said:

This already exists and has existed for ages

I was being facetious, the complications introduced to the financial markets over the last 20 years or so has just confused everyone, including the lenders.

10 minutes ago, Marvin said:

A typical mortgage usually costs 2.8 times the original loan

My old boss, who was a clever bloke, always worked on 3 times, he told me that in 1981.

[Marvin]

59 minutes ago, SteamyTea said:

the complications introduced to the financial markets over the last 20 years or so has just confused everyone, including the lenders.

Er..... I was in London learning all about selling them 40 years ago...  How time flies....

[SteamyTea]

1 minute ago, Marvin said:

Er..... I was in London learning all about selling them 40 years ago...  How time flies....

One day course was it?

Qualification by attendance.

[Adsibob]

12 hours ago, SteamyTea said:

the complications introduced to the financial markets over the last 20 years or so has just confused everyone, including the lenders.

What complications? I find mortgage finance very straightforward. If you want to fix, you fix, but at a cost. If you don’t want to pay that cost, don’t fix. But then you run the risk of paying when interest rates suddenly go up, like they have this year.

[SteamyTea]

37 minutes ago, Adsibob said:

What complications

The fees and charges to set a loan up.

I always took out variable,  repayment mortgages, never once had to pay a fee.

My sister, who worked for a bank, took out fixed rate, endowment mortgages, her rates where always higher, and she had a shortfall on the endowment. So had a supplementary charge.

This was back in the 80 and 90s, but with a simple repayment loan, you pay of a bit of the capital each month, so the interest payable on the remain capital is also reducing.

I got lucky that the loan I took out in 1986, and managed to overpay a little each year, was not hiked up as much in 1991/2.

[Adsibob]

10 minutes ago, SteamyTea said:

The fees and charges to set a loan up.

 

Nowadays, most lenders will offer you both fee free rates, and rates that are only accessible by paying a fee. The fee is typically £999. In my case, because my debt is so large, it always makes sense to pay the fee to access the cheaper rate. 

10 minutes ago, SteamyTea said:

I always took out variable,  repayment mortgages, never once had to pay a fee.

My sister, who worked for a bank, took out fixed rate, endowment mortgages, her rates where always higher, and she had a shortfall on the endowment. So had a supplementary charge.

This was back in the 80 and 90s, but with a simple repayment loan, you pay of a bit of the capital each month, so the interest payable on the remain capital is also reducing.

I got lucky that the loan I took out in 1986, and managed to overpay a little each year, was not hiked up as much in 1991/2.

Endowment mortgages were a con. Lucky I dodged those.

Edited August 12, 2023 by Adsibob

[LSB]

I did take out an endowment mortgage in 1986 on a 80% purchase.  Interest rates hiked to 15%+, but houses were cheaper, I didn't need to move and had a safe job so I just ignored it.  You can do that sort of thing in your twenties and leave to later.  My mortgage was only twice my salary.

On came the crash and negative equity, that did at least mean when I paid the 20% back after about 3 years I paid less than when it started.

I was also lucky that my 42k mortgage would  have been paid off by my endowment in 2018 as it was worth 43k.

In reality I'd paid off the money part of the mortgage many moons ago so the endowment just became a savings scheme.  There were many times over the years that I considered selling it, but never did because I was always offered less than I had paid.  It became part of our build budget 🙂

 

Now 3 of my 4 kids have mortgages for huge amounts for small houses in my opinion, but still beats renting, at least what they pay is paying of their mortgage and not someone elses.

Two have fixed, 1 has variable and has had some real hikes this year.  The 4th kid is a carer and will never buy because the money is so poor.  Her only chance is to meet someone and buy with them or wait until we die to get a deposit.

 

I don't know where it will end, but people will still need houses whether they buy or rent and it will even out, because it must.

 

Edited August 13, 2023 by LSB

[Amateur bob]

On 23/06/2023 at 13:37, gavztheouch said:

In hindsight low interest rates created bubbles in property and stocks at a time when things were quite stable ie 2010-2020. Now we have wars, supply shocks and climate change (transition is expensive) it’s a hell of a time to return rates to normal. 
 

Im 38 was going to build a house a few years ago. Unfortunately I have been saving for years and built up £200k that money is prob only worth £100k today in terms of building rates per m2. That’s a big hit to take, wish I’d bought a house pre covid at least my money would have somewhat held its value. 
 

If house prices fall close to where they were in 2019 I’ll prob buy and knock the self build on the head, for now at least.

im planning to build too, do you have a plot with planning permission?

[Amateur bob]

good afternoon im looking for advice if anyone can offer their opinion, im in a situation just now where i have just moved from my old house which was too small into a larger rented one, i own the old one outright and have just gained planning permission to build a house too,

 

im at a crossroads now do i rent the old house out to help pay my rent while i organise the housebuild(which could take a couple years) or do i sell and put the money into savings and collect 4-5% interest? the only issue with renting out is getting a tenant back out and house prices dropping....likewise house prices could continue to rise and i could miss out on that and the rent money

 

any advice appreciated

 

thanks

[Thedreamer]

I'm coming to the end of my original fix after moving from the self-build product at the end of 2020. I have a range of choices from my lender but my question is whether when you agree on a new product are you able to make an overpayment between the old product ending and the new one starting?  

 

My aim is to be mortgage free as soon as possible after turning 40.

[Marvin]

1 hour ago, Thedreamer said:

 

My aim is to be mortgage free as soon as possible after turning 40.

I did that and it only took me until I was 54.

[TonyT]

9 hours ago, Amateur bob said:

good afternoon im looking for advice if anyone can offer their opinion, im in a situation just now where i have just moved from my old house which was too small into a larger rented one, i own the old one outright and have just gained planning permission to build a house too,

 

im at a crossroads now do i rent the old house out to help pay my rent while i organise the housebuild(which could take a couple years) or do i sell and put the money into savings and collect 4-5% interest? the only issue with renting out is getting a tenant back out and house prices dropping....likewise house prices could continue to rise and i could miss out on that and the rent money

 

any advice appreciated

 

thanks

Sell the old house, bank the cash

build new house without any other external hassles such as tenants and not selling when you need to..

[Adsibob]

I’m currently being offered a two year tracker at 5.39% (0.14% over BoE Base Rate) interest only; or a two year fix at 6.09% interest only; or a three year fix at 5.94% again, interest only. If I opt for repayment, the rates are the same.

 

In each case, a fee of £995 is payable, but that’s a tiny proportion of the £855,000 I’m borrowing.

 

Anyone been offered better?

 

my LTV is slightly less than 50%.

 

 

[SteamyTea]

Interest rates in Russia have just gone up to 12%.

Argentina's are 118%