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getknk

Hpc Vs Interest Rate Hike

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guys,

Though I also feel, house prices will fall shortly..

but the interest rate is increasing faster than the wait for HPC ..

---------------------------------------------

Simple calculation of mortage from http://www.bbc.co.uk...alculator.shtml

---------------------------------------------

Mortgage : 150K

Repayment period: 25 years

Int rate % = 5%

Monthly repayment = £887 ( interest is £625 alone)

i.e. in 25yrs you are paying = 266K

---------------------------------------------

Mortgage : 150K

Repayment period: 25 years

Int rate % = 9%

Monthly repayment = £1273 ( interest is £1125 alone)

i.e. in 25yrs you are paying = 382K

---------------------------------------------

Does that mean is it worth to wait for hpc to happen or buy a house now ar fix term interest?

Edited by getknk

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The one thing you are missing is that you don't fix for 25 years. A long fix is 5 years (what are ten year fixes trading at?). So if you buy now, then rates rise and prices come down, in five years you have a large debt and high interest payments.

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The one thing you are missing is that you don't fix for 25 years. A long fix is 5 years (what are ten year fixes trading at?). So if you buy now, then rates rise and prices come down, in five years you have a large debt and high interest payments.

as I said , its just a simple calculation..

but would be great, if we have some more precise calcuation with various dependencies/variations.. good to build up a plan as well for all those who plan to buy homes..

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guys,

Though I also feel, house prices will fall shortly..

but the interest rate is increasing faster than the wait for HPC ..

---------------------------------------------

Simple calculation of mortage from http://www.bbc.co.uk...alculator.shtml

---------------------------------------------

Mortgage : 150K

Repayment period: 25 years

Int rate % = 5%

Monthly repayment = £887 ( interest is £625 alone)

i.e. in 25yrs you are paying = 266K

---------------------------------------------

Mortgage : 150K

Repayment period: 25 years

Int rate % = 9%

Monthly repayment = £1273 ( interest is £1125 alone)

i.e. in 25yrs you are paying = 382K

---------------------------------------------

Does that mean is it worth to wait for hpc to happen or buy a house now ar fix term interest?

But after a HPC you wont need a £150k mortgage anymore.

Assuming 25% deposit and total purchase price £200k after a 25% HPC your purchase price is now £150k. Same deposit assuming you've not saved extra. Now gives 66%LTV and mortgage of £100k for the same house.

Total repayable is £254,514. At 9% interest.

Also your assuming you can get a 25 year fix at 5%

The higher your current LTV the more you will benefit from a house price crash. After two more years of saving and a decent HPC I won't even need a mortgage! :).

Edited by Pent Up

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But after a HPC you wont need a £150k mortgage anymore.

Assuming 25% deposit and total purchase price £200k after a 25% HPC your purchase price is now £150k. Same deposit assuming you've not saved extra. Now gives 66%LTV and mortgage of £100k for the same house.

Total repayable is £254,514. At 9% interest.

Also your assuming you can get a 25 year fix at 5%

The higher your current LTV the more you will benefit from a house price crash. After two more years of saving and a decent HPC I won't even need a mortgage! :).

fair argument..

As i said the calculation is much complex than above.. but if we all can put more specific scenarios.. we could then derive the best case

really want some genuine mortgage values and charts to analyse..

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fair argument..

As i said the calculation is much complex than above.. but if we all can put more specific scenarios.. we could then derive the best case

really want some genuine mortgage values and charts to analyse..

Yes but we don't have a crystal ball. How much will rates rise, how much will house prices fall? What will the rate of inflation be??? Will you be getting 1% pay rises on avergage over the next twenty years or will they be in the region of 5 to 10 percent?

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And if you are fixed for 5 years at today's rates then changes in your personal circumstances are what it is all about.

That is: if you had a guaranteed job with a good growth rate in salary, an excellent pension and strong promotional prospects (anyone reading: neo-governmental 'efficiency engineer' in all this) and a deposit (today) of 20% or more then you would need only a mild HPC to make it all worthwhile (the risk of buying now for the trade off of the house that is a home stability) ...

But if you can't find a non-job that is ring-fenced then what ... hhmmmmm?

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Consider also that if you have a relatively small deposit, your mortgage rate will have the high risk of further falls priced in. So when prices have reached their lows and this risk is lower, the rates won't be so punitive for high LTV borrowers, even though base rates would have risen.

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But after a HPC you wont need a £150k mortgage anymore.

Assuming 25% deposit and total purchase price £200k after a 25% HPC your purchase price is now £150k. Same deposit assuming you've not saved extra. Now gives 66%LTV and mortgage of £100k for the same house.

Total repayable is £254,514. At 9% interest.

Also your assuming you can get a 25 year fix at 5%

The higher your current LTV the more you will benefit from a house price crash. After two more years of saving and a decent HPC I won't even need a mortgage! :).

Thats also where I'm looking to be, just need to keep my job and a 25% fall

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Does that mean is it worth to wait for hpc to happen or buy a house now ar fix term interest?

If your deposit is increasing month by month, it's always going to be better to keep saving. If the rates go up, you can save even more by waiting for them to come down again.

As long as the house prices are not going up, you cannot lose by continuing to save and waiting for low rates post crash (with larger deposit). It's simple maths.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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