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Mancunian284

Mortgage costs hit 2 year high as lenders anticipate rate rise

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Paying off mortgage/reducing the term over recent years at such low interest rates is a way of saving money, creating own equity.......a path to being mortgage free.......those that chose to save or spend in other ways, their choice.....perhaps they may pay down lump sums when rates rise from the debt savings from other savings/investments they have made over last 10 years or so.;)

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7 hours ago, winkie said:

Paying off mortgage/reducing the term over recent years at such low interest rates is a way of saving money, creating own equity.......a path to being mortgage free.......those that chose to save or spend in other ways, their choice.....perhaps they may pay down lump sums when rates rise from the debt savings from other savings/investments they have made over last 10 years or so.;)

There will be some sensible people, who already owned when interest rates dropped, who have viewed low interest rates as a once in a lifetime gift and used the opportunity to pay down their mortgage.  I personally know of a few people who have been IO for ten years plus and have spent the money on expensive holidays and cars.

Edited by Mancunian284

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3 minutes ago, Mancunian284 said:

There will be some sensible people who have viewed low interest rates as a once in a lifetime gift and used the opportunity to pay down their mortgage.  I personally know of a few people who have been IO for ten years plus and have spent the money on expensive holidays and cars.

A gift from the prudent and thrifty to the feckless thanks to gov and state distortions choosing winners and losers. Winners undeserving of their win and losers undeserving of their loss. A gross injustice. When will the populous demand an end to this poisonous and corrosive system.???

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17 minutes ago, Mancunian284 said:

There will be some sensible people who have viewed low interest rates as a once in a lifetime gift and used the opportunity to pay down their mortgage.  I personally know of a few people who have been IO for ten years plus and have spent the money on expensive holidays and cars.

The gift for me is the ability to not pay down my mortgage (more than the standard repayments) with a cost of 1.6% pa for the loan and using that money to generate a > 5% return elsewhere.

EDIT: I'm not saying I like the system but it is what it is so I play the game accordingly.

Edited by dugsbody

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31 minutes ago, Mancunian284 said:

There will be some sensible people who have viewed low interest rates as a once in a lifetime gift and used the opportunity to pay down their mortgage.  I personally know of a few people who have been IO for ten years plus and have spent the money on expensive holidays and cars.

And those people who spend in that way have given us this so called "miracle economy", not long now before the British economy of the last 20 years is exposed for what it really was.

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23 minutes ago, dugsbody said:

The gift for me is the ability to not pay down my mortgage (more than the standard repayments) with a cost of 1.6% pa for the loan and using that money to generate a > 5% return elsewhere.

EDIT: I'm not saying I like the system but it is what it is so I play the game accordingly.

But you’ve used the opportunity to save and not blown it on holidays and cars you couldn’t otherwise afford.

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1 minute ago, Mancunian284 said:

But you’ve used the opportunity to save and not blown it on holidays and cars you couldn’t otherwise afford.

Well, not really. I never benefited from the reduction in rates. By the time I bought, rates were already on the floor and house prices had risen to compensate. So I'm paying off something already inflated by the low rates rather than having benefited from lower prices then subsequent lower rates. It's just that I choose not to overpay right now. I'm saving very, very hard though in preparation if rates ever do rise, in which case I will either pay off the mortgage entirely (I've saved really hard) or a big part of it depending on the scope of the rate rises.

It's just that I got older, my hand was starting to get forced, I did some maths, estimated the probabilities of rate rises and future government actions and decided to play the game the way it was rigged, and so I stopped renting and bought.

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4 minutes ago, dugsbody said:

Well, not really. I never benefited from the reduction in rates. By the time I bought, rates were already on the floor and house prices had risen to compensate. So I'm paying off something already inflated by the low rates rather than having benefited from lower prices then subsequent lower rates. It's just that I choose not to overpay right now. I'm saving very, very hard though in preparation if rates ever do rise, in which case I will either pay off the mortgage entirely (I've saved really hard) or a big part of it depending on the scope of the rate rises.

It's just that I got older, my hand was starting to get forced, I did some maths, estimated the probabilities of rate rises and future government actions and decided to play the game the way it was rigged, and so I stopped renting and bought.

I’m in a similar situation as you were a few years ago.  I live in Manchester which is a bubble.  I have also been saving hard and living what looks like a poverty stricken lifestyle to colleagues/ friends in order to save.  I’m ready to buy but am increasingly horrified by the price of a 3 bedroom end terrace (nice but not flash area).  I’ve got enough of a deposit to make sure I can get a good mortgage deal and have no intentions of stretching myself.  The main reason I haven’t bought over the last 6 months is because I think we might be at the edge of a price correction, due to all the things we discuss on here.  If there are no further signs of the correction in the next 6-12 months then I’m going to buy and get a 5-10 year, lowest interest rate I can find, mortgage fix.

I don’t like the system either but I can’t change it.  As you say, sometimes you have to make the best of the situation you are in.

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5 minutes ago, Mancunian284 said:

I’m in a similar situation as you were a few years ago.  I live in Manchester which is a bubble.  I have also been saving hard and living what looks like a poverty stricken lifestyle to colleagues/ friends in order to save.  I’m ready to buy but am increasingly horrified by the price of a 3 bedroom end terrace (nice but not flash area).  I’ve got enough of a deposit to make sure I can get a good mortgage deal and have no intentions of stretching myself.  The main reason I haven’t bought over the last 6 months is because I think we might be at the edge of a price correction, due to all the things we discuss on here.  If there are no further signs of the correction in the next 6-12 months then I’m going to buy and get a 5-10 year, lowest interest rate I can find, mortgage fix.

I don’t like the system either but I can’t change it.  As you say, sometimes you have to make the best of the situation you are in.

Best of luck. It's infuriating that the world has turned out like this but there are many other positive things so I try to stay focused on those and not be too bitter than I'm having to work a lot harder to achieve the same level of wealth as people born earlier.

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37 minutes ago, dugsbody said:

Best of luck. It's infuriating that the world has turned out like this but there are many other positive things so I try to stay focused on those and not be too bitter than I'm having to work a lot harder to achieve the same level of wealth as people born earlier.

Thank you.  Can’t get away from the fact that something that is a basic human need has become such a gamble.  If good tenants had better protection I might not feel the need to buy, but things are as they are.

Edited by Mancunian284

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This was only a gift to those who purchased there house when rates were set at a sensible level. If  like me, you had to buy in the last 10 years, the low rates were priced into the purchase. 

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42 minutes ago, locky82 said:

This was only a gift to those who purchased there house when rates were set at a sensible level. If  like me, you had to buy in the last 10 years, the low rates were priced into the purchase. 

Yes, I was referring to those who already owned when interest rates dropped.

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On 22/04/2018 at 9:16 AM, Mancunian284 said:

https://www.theguardian.com/money/2018/apr/21/mortgage-rate-highest-two-years?CMP=Share_iOSApp_Other

 

Hopefully.  Another chip away at buyer sentiment.  Seems to be an MSM campaign against it now though and the B of E are split on it.

A half baked piece, I love the way the higher rate is articulated to the anticipated rate increase. Of course it's nothing to do with stopping the free money tap(TFS)

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22 hours ago, Wayward said:

A gift from the prudent and thrifty to the feckless thanks to gov and state distortions choosing winners and losers. Winners undeserving of their win and losers undeserving of their loss. A gross injustice. When will the populous demand an end to this poisonous and corrosive system.???

The famous quote from Del Boy "this time next year we will be millionaires".

What I believe though once we have financial shock and start  rebalancing, downturn, whatever you want to call it, just having a few thousand in the bank with zero debt or even having  no money in the bank and zero debt with a clean credit record will be the new black, it will be like being a millionaire in the old days.

Those that kept playing the speculation game and borrowed on that basis, always thinking they could never lose, their lives will be as good as finished for a good long while.

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For my own borrowing (when I buy a house eventually), that is the change, I am looking for a 5 year fixed with 85LTV.
Best rate offered:

January 2017: 2.19% for 5 year with 1.5K fees

June 2017: 2.13% for 5 year with 1.5K fees

December 2017: 2.00% for 5 years with 1.5K fees

March 2018: 2.06% for 5 year with 1.0K fees

April 2018 (current): 2.09% for 5 years with 1.2K fees

 

So marginal changes in the last few months to be honest.

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51 minutes ago, warrior88 said:

For my own borrowing (when I buy a house eventually), that is the change, I am looking for a 5 year fixed with 85LTV.
Best rate offered:

January 2017: 2.19% for 5 year with 1.5K fees

June 2017: 2.13% for 5 year with 1.5K fees

December 2017: 2.00% for 5 years with 1.5K fees

March 2018: 2.06% for 5 year with 1.0K fees

April 2018 (current): 2.09% for 5 years with 1.2K fees

 

So marginal changes in the last few months to be honest.

Fees are high for small mortgages and by your examples may be increasing.

Without /low fees 50% loan to value

Variable 2 year £145 fee 1.25%

Fixed 3 year 1.84%

Fixed 5 year 1.94% HSBC a few days ago if relevant to you

Fixed 10 year 2.49%

These are current, I wish I had historical.

Mortgage meter seems to have disappeared.  Any alternatives?

 

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22 hours ago, Mancunian284 said:

 If there are no further signs of the correction in the next 6-12 months then I’m going to buy and get a 5-10 year, lowest interest rate I can find, mortgage fix.

I don’t like the system either but I can’t change it.  As you say, sometimes you have to make the best of the situation you are in.

I totally get the frustration. I bought into shared ownership a few years ago and used the monthly savings from paying less mortgage/rent into overpayments. Got around £11k equity now which will keep increasing with overpayments and should give me more options in the future. Ridiculous that we have to think how to best work around the rigged financial system because you have little choices. 

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16 minutes ago, NorthamptonBear said:

Fees are high for small mortgages and by your examples may be increasing.

Without /low fees 50% loan to value

Variable 2 year £145 fee 1.25%

Fixed 3 year 1.84%

Fixed 5 year 1.94% HSBC a few days ago if relevant to you

Fixed 10 year 2.49%

These are current, I wish I had historical.

Mortgage meter seems to have disappeared.  Any alternatives?

 

Well I keep a track in an excel as a personal preference, for my own house purchase decision.

No fees are decreasing or relatively stable, for a small loan these fees may seems high but for £0.5m probably the fee is irrelevant.

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19 hours ago, warrior88 said:

Well I keep a track in an excel as a personal preference, for my own house purchase decision.

No fees are decreasing or relatively stable, for a small loan these fees may seems high but for £0.5m probably the fee is irrelevant.

Thanks. I don't watch it that keenly.  Some huge fees on many mortgages, when I include them it makes a big difference to my situation.  

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23 minutes ago, NorthamptonBear said:

Thanks. I don't watch it that keenly.  Some huge fees on many mortgages, when I include them it makes a big difference to my situation.  

Agreed.

Even with a 200k mortgage, a 1k fee is pretty chunky - 0.5%

Especially when the mortgage deals only lasts a couple of years, before going to a  notable higher SVR or face paying a similar lot of fees again.

 

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7 minutes ago, spyguy said:

Agreed.

Even with a 200k mortgage, a 1k fee is pretty chunky - 0.5%

Especially when the mortgage deals only lasts a couple of years, before going to a  notable higher SVR or face paying a similar lot of fees again.

 

I do wonder if a few people ignore the fees or end up putting them on the mortgage.

£1700-2500 I've seen/noticed.  Not relevant to me so I discard / take little notice of those mortgages, but many must pay them for big mortgage debt properties (London/South-east/help to buy).

 

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2 minutes ago, NorthamptonBear said:

I do wonder if a few people ignore the fees or end up putting them on the mortgage.

£1700-2500 I've seen/noticed.  Not relevant to me so I discard / take little notice of those mortgages, but many must pay them for big mortgage debt properties (London/South-east/help to buy).

 

Agreed.

The higher the LTV, lower deposit, the higher the fee.

Ive a small (even smaller now) mortgage with First Direct.

5 years fix at 1.6%ish (cant remember the exact its more than 1.5, less than 2).

No fee. No limit on overpayment as long as theres some balance for the entire 5 year fix.

20% has gone in a year, with just a 70% overpayment - Im slightly worried that IR will go up a lot.

But Im in the North.

 

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37 minutes ago, spyguy said:

Agreed.

The higher the LTV, lower deposit, the higher the fee.

Ive a small (even smaller now) mortgage with First Direct.

5 years fix at 1.6%ish (cant remember the exact its more than 1.5, less than 2).

No fee. No limit on overpayment as long as theres some balance for the entire 5 year fix.

20% has gone in a year, with just a 70% overpayment - Im slightly worried that IR will go up a lot.

But Im in the North.

 

Similar to mine. But I have a higher-ish IR, no fix. but I overpay too. 

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  • 301 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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