Jump to content
House Price Crash Forum
The Masked Tulip

550K House, 50K Deposit, 90% Mortgage

Recommended Posts

Have been hearing a story for a few months about this couple looking at half a million pound houses around the Gower. Some EAs have been almost genuflecting at mention of their name. Been right p*ssing me off.

Anyhow, they have bought a house which needs a new kitchen and a fairish bit of updating for 550K. Turns out they have a 50K deposit and have taken out a 90% mortgage.

90% mortgage on a 550K house!

Young couple, early 20s. I hope they realise that IRs go up.

Share this post


Link to post
Share on other sites

Insane. :o

Go here, to the BBC mortgage calculator:

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

£500,000 mortgage. At 5% (lets assume that is the current mortgage) they are paying close to £3,000 per month.

I am assuming a 25 years mortgage.

Imagine interest rates went to 15% like they did in the 90s.

That's £6,400 per month.

Even at 10% they are looking at £4,500.

What if they had to sell and prices fell 10%?

Share this post


Link to post
Share on other sites

:P

Well spotted. I will now go out and shoot myself for that. Clearly I am not worthy of existence :lol:

Friend of mine knows someone on the Gower trying to flog some house that an EA has told her is worth about 2.5 times what she paid for it about 5 or 6 years ago.... for about 4 years now... and the lady is in constant tears at getting no viewings...

Nuts. Probably could sell it for what she paid for it.

Share this post


Link to post
Share on other sites

If interest rates go up, the banks will not repossess - Ireland is the new model for that. You will be left renting looking at your neighbours in their large houses living mortgage free like I am.

Share this post


Link to post
Share on other sites

90% mortgages have been common for a generation plus. The surprising thing here is that if they are within normal affordability limits i.e. 4x income then they have only saved 50k despite earning £140k a year. Hang on, save and get a better deal!

Share this post


Link to post
Share on other sites

If interest rates go up, the banks will not repossess - Ireland is the new model for that. You will be left renting looking at your neighbours in their large houses living mortgage free like I am.

Mid 2005 was the tipping point here, everything was set up for repossessions and return to normality, the government bottled it and set the standard for the next god knows how many years.

Decided at that point that the government of the day will do pretty much everything to keep people in their houses, if you can't beat them join them.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   224 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.