Non, je ne regrette rien

[spyguy]

1 minute ago, locky82 said:

  During a bit of runaway inflation where would you rather have your wealth?

Swiss francs.

[locky82]

1 minute ago, TheCountOfNowhere said:

It sure is...in the U.S...not in the UK tho. The mortgage debt hangs around for something like 13 years. They can take it all off you.  Do we live in the U.S ?

Its 6 years. The Limitations act states 14 but Mortgage code of practice rules are 6. even so, whats the worst that happens. You keep your head down for 6 years and ignore a few letters written in red ink 

[locky82]

1 minute ago, spyguy said:

Swiss francs.

Some bitcoin too, maybe some gold? Still a mortgaged house beats sterling

[giggler000]

4 hours ago, spyguy said:

2 years down. Only 38 left ...

 

you forgot the divorce and csa pushing his monthly repayments up a tad

[Hague]

Doesn't MMR and the loan to income ratio prevent longer mortgages. I.e. Longer mortgages shouldn't be necessary at current interest rates because the repayments are (currently) low.

How could somebody borrow 4.5 times income but also need to extend out to 30 years or beyond?

[TheCountOfNowhere]

1 minute ago, giggler000 said:

you forgot the divorce and csa pushing his monthly repayments up a tad

I think divorce was in my original rant.

 

What's the odds on divorce, 50%+? 

[ThoughtCriminal]

Just now, TheCountOfNowhere said:

I think divorce was in my original rant.

 

What's the odds on divorce, 50%+? 

Yup. And over 90% initiated by women.

 

This boy is a fool.....

[GreenDevil]

21 minutes ago, locky82 said:

I only ever compare it to the alternative. Renting. When compared with that its reasonable. 

Mortgage At 0.25% your payment of 1200 is 1200. Your rent is 1200.

At 5% your payment is 2400, your rent is 1200, your LLs payment is 2400. 

You are signing up for 35 years. To buy a house that 25 years ago was 42000 not 420,000.

IMO you are better of waiting now.

HPI has run its course. Jezza is going to level the field.

If you think more HPI then go ahead, load up with debt at 0.25%....

 

[giggler000]

9 minutes ago, TheCountOfNowhere said:

I think divorce was in my original rant.

 

What's the odds on divorce, 50%+? 

at least a good starting point.  today a lot of pressure on young people to follow there parents and tow the line, sort of thing advertised by articles like this.  some ladders go nowhere

 

[Kosmin]

In the first sentence there is a link (opting for up to 40-year mortgages) to an article entitled: Young face growing mortgage debt burden by Kevin Peachey

which seems to suggest this is a bad thing and long terms aren't the answer. He ends by observing:

"The latest survey from the Royal Institution of Chartered Surveyors (RICS) showed that more of its members expected house price falls than those expecting rises in the next three months.

Price falls have been most marked in London and South East England in September, they said, with falls also recorded in East Anglia and North East England.

On a national level, demand from new buyers and sales also fell in September, the survey suggested."

 

Also negative equity stories:

http://www.bbc.co.uk/news/business-26389009

 

It seems to me more like laziness (I'll just ask some people how they feel rather than have to actually investigate) than a pro-HPI agenda.

[GreenDevil]

1 hour ago, locky82 said:

Imagine that - but they have rented - 66 and he don't even own the shit hole. 

 

40 years is a very long lock in. Do you not think economic or personal circumstances might change in that time?

Or is your end of life aspiration to have a happy retirement in bracknell after 40 yrs of servitude to the banks\government?

[locky82]

12 minutes ago, GreenDevil said:

Mortgage At 0.25% your payment of 1200 is 1200. Your rent is 1200.

At 5% your payment is 2400, your rent is 1200, your LLs payment is 2400. 

You are signing up for 35 years. To buy a house that 25 years ago was 42000 not 420,000.

IMO you are better of waiting now.

HPI has run its course. Jezza is going to level the field.

If you think more HPI then go ahead, load up with debt at 0.25%....

 

How long do you wait? 

[durhamborn]

41 minutes ago, GreenDevil said:

The interesting item is the interest. Interest will kill you if rates rise.

Who can predict what will happen in 35 years? 20 maybe. but 35 or even 40? 

Perhaps UK will be a banana republic with rates at 20% (ok its already a banana republic but without the 20% rates).

The only thing sure is anyone loading the boat with debt on a shoe box for 35 years at 0.25% in london is a complete idiot.

I dont think rates will hit 20% in a reflation,though i do expect we will see close to, or over double figures by 2025.In 1981 you could get a 30 year mortgage.The rate was 18%.Average rates were 17%.While we might not get to those extremes history would say we will see much much higher levels.Then again its different this time of course because the central banks have everyone's backs,its different we have the internet,its different we have the motor car,its different we have railways,its different we have canals,its different we have.....These people have bought at insane prices,stretching themselves on payments, at the very end of a 35 year dis-inflation cycle.They have locked themselves in just before a huge about turn.They will be educated on that folly soon enough.

[TheCountOfNowhere]

16 minutes ago, Kosmin said:

In the first sentence there is a link (opting for up to 40-year mortgages) to an article entitled: Young face growing mortgage debt burden by Kevin Peachey

which seems to suggest this is a bad thing and long terms aren't the answer. He ends by observing:

"The latest survey from the Royal Institution of Chartered Surveyors (RICS) showed that more of its members expected house price falls than those expecting rises in the next three months.

Price falls have been most marked in London and South East England in September, they said, with falls also recorded in East Anglia and North East England.

On a national level, demand from new buyers and sales also fell in September, the survey suggested."

 

Also negative equity stories:

http://www.bbc.co.uk/news/business-26389009

 

It seems to me more like laziness (I'll just ask some people how they feel rather than have to actually investigate) than a pro-HPI agenda.

You're new to these ere parts ain't you ?

[Thorn]

6 minutes ago, locky82 said:

How long do you wait? 

Up to yourself.

The GFC wiped out 60% of house values in NIreland. Plenty of negative equity rolling about here still and I'd say that's people with 25-year mortgages. 

How far do you expect things to fall where you are and why? 

[Mr Banks]

38 minutes ago, Hague said:

Doesn't MMR and the loan to income ratio prevent longer mortgages. I.e. Longer mortgages shouldn't be necessary at current interest rates because the repayments are (currently) low.

How could somebody borrow 4.5 times income but also need to extend out to 30 years or beyond?

Nope as long as its repayment is affordable. MMR is pretty toothless 15% of loans can be over 4.5x income some like @spyguy  disagree but articles like this show how easily it is to circumnavigate. Still confident in my prediction (though it frustrates me to say it) that house prices have further to rise yet because of longer mortgage terms like these. And to be honest nobody on here knows future interest rates. Japan has had 25 years of sub 1% interest rates with no sign of a northwards trend. Their bet on low interest rates could well turn out good.

[NuBrit]

1 hour ago, GreenDevil said:

Mortgage At 0.25% your payment of 1200 is 1200. Your rent is 1200.

At 5% your payment is 2400, your rent is 1200, your LLs payment is 2400. 

You are signing up for 35 years. To buy a house that 25 years ago was 42000 not 420,000.

IMO you are better of waiting now.

HPI has run its course. Jezza is going to level the field.

If you think more HPI then go ahead, load up with debt at 0.25%....

 

I think you're missing the point, it's impossible to take out a mortgage at 0.25%. The most common mortgage that people take out in the UK is the standard variable rate and most of the high street lenders will offer that to those seeking a 90%+ LTV mortgage at a rate of about 3.5%-3.7%.

[Digsby]

2 hours ago, locky82 said:

It sounds like someone has put a gun to your head. 

TBH I wouldn't go variable - In this market I would only go 5 year fix. 

 

Let's call it Japanese torture. Not so much a gun to my head but the constant dripping of water, for years and years.

Without the benefit of hindsight, is there any point in the past 5 years you wouldn't have recommended going on a fixed rate?

 

In my view, fixed rates have the risks priced into them. It's a safe bet, but it's not really a bet at all. I'd rather the chance of winning than the guarantee of losing.

I might regret saying that, but I'm up for finding out. I'd prefer to be subject to the ravages of monetary policy than the calculations of a risk assessor.

[NuBrit]

2 minutes ago, Digsby said:

Let's call it Japanese torture. Not so much a gun to my head but the constant dripping of water, for years and years.

Without the benefit of hindsight, is there any point in the past 5 years you wouldn't have recommended going on a fixed rate?

 

In my view, fixed rates have the risks priced into them. It's a safe bet, but it's not really a bet at all. I'd rather the chance of winning than the guarantee of losing.

I might regret saying that, but I'm up for finding out. I'd prefer to be subject to the ravages of monetary policy than the calculations of a risk assessor.

I agree, when you consider what's happened over the last 30 years, if you had went fixed, you would likely have lost money against a variable rate.

However, I think things really are different this time. Consider a 75% LTV mortgage. A 10 year fix can be had for as low as 2.5%. The very cheapest lifetime tracker is 2% + BOE rate which is currently 0.25%, giving you a real rate of 2.25%. Given that rates are going up next month, or very shortly after, the tracker rate is already going to match the fixed rate and is likely to go up against in fairly short order. 

I literally cannot see how you lose with the 10 year fixed at this point.

[NuBrit]

FYI regarding the above, that may be my pocket talking.

I was actually looking at remortgaging my existing house, but instead decided to go buy a new place. However I do live in Northern Ireland in an area where a decent quality 4 bedroom detached house can be had for £150k. If the value of that house lost 50% of its value, I would literally not lose a wink of sleep over it. More than can be said for the two spivs I watched on Krusty and Phil the other night who dropped £750k on a 2 up, 2 down mid-terrace in a fashionable part of London that would be absolutely useless should they have more than one kid.

[locky82]

I wouldn't like to be at the mercy of the lender.

Also rates are so cheap you could win small but lose big. Especially if some of the predictions on this thread happen. I'm sure they won't 

[Kosmin]

1 hour ago, TheCountOfNowhere said:

You're new to these ere parts ain't you ?

It's not like you to be cryptic

[NuBrit]

7 minutes ago, locky82 said:

I wouldn't like to be at the mercy of the lender.

Also rates are so cheap you could win small but lose big. Especially if some of the predictions on this thread happen. I'm sure they won't 

When I say you cannot go wrong with the 10 year fixed, I mean if you absolutely have to go for a mortgage, then it's the best (least bad) option out there.

[adarmo]

5 hours ago, oatbake said:

Precisely. Just having rates increase to 1% will probably turn their £1,200 a month onto £2,400 a month... They are at best reckless and will no doubt be looking for sympathy if they come unstuck.

You're not the Lucasian Chair of Mathematics, are you?

A 1% increase in interest rates causing a £1,200 increase in rent? What do you think the outstanding balance would need to be?

[oatbake]

1 hour ago, adarmo said:

You're not the Lucasian Chair of Mathematics, are you?

A 1% increase in interest rates causing a £1,200 increase in rent? What do you think the outstanding balance would need to be?

I meant the base rate. I have a feeling that banks are going to add a little premium onto any base rate increases. Overall credit tightening... But we will see....My point is that a small increase in interest rates will massively increase their repayments. and we are now expecting rate increases. With two young (preschool) kids, they could well be shelling out a small fortune on childcare.... or only one of them is working... I know I have a decent job and my after-tax salary would struggle with 1,200, let alone a significant increase on that... Maybe they have used Help to Buy and will be paying interest on a further 20% in three years time? 

On the other hand, maybe they're both doctors and coining it in? Maybe they have parents who take care of the childcare side of things? There are a lot of unknowns, but hardly the kind of typical example that should be used in these kinds of articles (unless there is a hidden agenda). For any ordinary family, it would be reckless to have mortgage payments that high (for the next forty years!!), given that base rates will go up at some point.

Still, I absolutely believe people should have the freedom to borrow whatever they like.... and for banks to lend whatever they like, to whoever they like.... as long as all parties accept responsibility for any consequences and don't go looking for some kind of bailout if it all goes wrong...