Si1 Posted August 19, 2016 Share Posted August 19, 2016 Am I right that currently you can get 5x joint salary mortgages, which is roughly double what you could get 20 years ago? Quote Link to comment Share on other sites More sharing options...
btd1981 Posted August 19, 2016 Share Posted August 19, 2016 In my personal experience, roughly, yes. Does it not fill you with joy and excitement? You should feel grateful for the opportunity to access so much debt, dear boy Quote Link to comment Share on other sites More sharing options...
Wurzel Of Highbridge Posted August 19, 2016 Share Posted August 19, 2016 I had to remortgage (second mortgage) to buy the ex-wife out. First direct were pushing me to take out interest only so I could borrow more as it would be more affordable. Quote Link to comment Share on other sites More sharing options...
VeryMeanReversion Posted August 19, 2016 Share Posted August 19, 2016 Am I right that currently you can get 5x joint salary mortgages, which is roughly double what you could get 20 years ago? I remember (3x main + 1 x second) income being the multiples 20 years ago. That was for two mortgages I had in the mid 90's. So if main was 25K and second was 15K then.....(ignoring inflation) 20 years ago => limit was 85K If 5x joint now => limit is 200K So... House prices = Credit Availability. Quote Link to comment Share on other sites More sharing options...
Sandwiches33 Posted August 19, 2016 Share Posted August 19, 2016 My bank has a "feature" whereby it calculates your affordability and lets you know how much you can borrow. I like to dabble with it for fun. I have noticed in the past couple of months it has been offering me less and less, yet my circumstances are no different. I think they know something they aren't admitting. Quote Link to comment Share on other sites More sharing options...
Ballyk Posted August 19, 2016 Share Posted August 19, 2016 If interest rates were higher, multiples would be lower. Higher multiples 'make sense' when debt is cheap to service. Trouble is, now that so many people have mortgages at high multiples, higher interest rates would ruin them, and house prices would tumble. Ergo, interest rates cannot be put up. Except ... what happens if inflation shoots up, due to some unforeseen event? Are interest rates still supposed to be about controlling inflation? If yes, interest rates will go up, and we will have some more 'interesting times'. Quote Link to comment Share on other sites More sharing options...
btd1981 Posted August 19, 2016 Share Posted August 19, 2016 The BoE will 'look through' any temporary/permanent spike in inflation. Quote Link to comment Share on other sites More sharing options...
Fully Detached Posted August 19, 2016 Share Posted August 19, 2016 If interest rates were higher, multiples would be lower. Higher multiples 'make sense' when debt is cheap to service. Trouble is, now that so many people have mortgages at high multiples, higher interest rates would ruin them, and house prices would tumble. Ergo, interest rates cannot be put up. Except ... what happens if inflation shoots up, due to some unforeseen event? Are interest rates still supposed to be about controlling inflation? If yes, interest rates will go up, and we will have some more 'interesting times'. Followed by 20 years of bleating feckless claiming that they got ******ed over by the government and that that nobody could have foreseen interest rates rising. I know people who've only just stopped bitching about that from the 90s crash, and then only because they've finally got some equity in their houses again. Problem is, I honestly don't see rates rising now until the BoE lose control. Which is not to say I'd be taking out a gargantuan mortgage in the expectation that the BoE know what they're doing, but millions of others will. Quote Link to comment Share on other sites More sharing options...
london_thirtythree Posted August 19, 2016 Share Posted August 19, 2016 Nationwide seem to be offering to lend us almost 100k more than they were in January.. (which is about 200k more than I am comfortable borrowing!) Hopefully they will start tightening it up so people don't take the risk and over extend themselves - if I borrowed the full amount on offer, think I would be heading for repossession-ville pretty quickly! Quote Link to comment Share on other sites More sharing options...
rantnrave Posted August 19, 2016 Share Posted August 19, 2016 Don't forget that if people couldn't borrow all this money, they couldn't afford the house prices... Quote Link to comment Share on other sites More sharing options...
Sandwiches33 Posted August 19, 2016 Share Posted August 19, 2016 Nationwide seem to be offering to lend us almost 100k more than they were in January.. (which is about 200k more than I am comfortable borrowing!) Hopefully they will start tightening it up so people don't take the risk and over extend themselves - if I borrowed the full amount on offer, think I would be heading for repossession-ville pretty quickly! Last year I asked about borrowing a small amount, my plan was to buy a flat somewhere I like. Then rent in all the places I have to work but have a nice actual place of mine to retreat too. I was gonna put a big deposit and pay it off as soon as I could I asked about borrowing 45k the bank came back to me and said the most they will offer is 270k for a second home! LOL I thought right there is why we have HPI. Quote Link to comment Share on other sites More sharing options...
eek Posted August 19, 2016 Share Posted August 19, 2016 I remember (3x main + 1 x second) income being the multiples 20 years ago. That was for two mortgages I had in the mid 90's. So if main was 25K and second was 15K then.....(ignoring inflation) 20 years ago => limit was 85K If 5x joint now => limit is 200K So... House prices = Credit Availability. Always has been.... Quote Link to comment Share on other sites More sharing options...
1888 Posted August 19, 2016 Share Posted August 19, 2016 They don't trap people in debt to let them off. Boom+Bust is policy, the vultures are waiting to pick the bones of the starry eyed ladder ascenders. The cash rich will swoop , buy up cheap property and rent it out til the next generation can be fooled by house prices only go up. Sell when it tops and sit tight til it bursts again. Rinse and repeat. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted August 19, 2016 Share Posted August 19, 2016 I remember (3x main + 1 x second) income being the multiples 20 years ago. That was for two mortgages I had in the mid 90's. So if main was 25K and second was 15K then.....(ignoring inflation) 20 years ago => limit was 85K If 5x joint now => limit is 200K So... House prices = Credit Availability. Lower wages 20 years ago? Then at £18k & £6k, 3x main plus 1x second = £60k, which is why the average house was £60k in the late 90's The switch to joint income multiplies has tripled prices when wages haven't even doubled. Quote Link to comment Share on other sites More sharing options...
eek Posted August 19, 2016 Share Posted August 19, 2016 (edited) Lower wages 20 years ago? Then at £18k & £6k, 3x main plus 1x second = £60k, which is why the average house was £60k in the late 90's The switch to joint income multiplies has tripled prices when wages haven't even doubled. There are 2 big changes over the past 20 years.. The move to treat joint income as 3x both rather than 3x main + 1x second income... That's forced a lot of families into the position where both people have to work full time. The reduction in interest rates and a subsequent increase in multipliers from 3x income to 5x income.... Hopefully as prices drop this insanity will disappear... Edited August 19, 2016 by eek Quote Link to comment Share on other sites More sharing options...
Si1 Posted August 19, 2016 Author Share Posted August 19, 2016 There are 2 big changes over the past 20 years.. The move to treat joint income as 3x both rather than 3x main + 1x second income... That's forced a lot of families into the position where both people have to work full time. The reduction in interest rates and a subsequent increase in multipliers from 3x income to 5x income.... Hopefully as prices drop this insanity will disappear... It'll take another 20 years to reverse Quote Link to comment Share on other sites More sharing options...
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