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Mortgages rates hit a record low

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The extraordinary price war has intensified as banks struggle to pull in customers.

Mortgages have hit record low rates in a 'cut-throat' price war. Fixed rates on five-year deals have dropped below 1.5 per cent for the first time.

With the election and Brexit uncertainty giving buyers cold feet, banks are offering steep discounts to pull in customers.

Lenders have also slashed rates for two-year mortgages to as little as 1.05 per cent. Experts predict they could soon cut these to less than 1 per cent.

'For buyers it is all about affordability. So it looks like banks will keep cutting rates – and who knows how low they will go.'

Daily Mail

 

Push a little further, but it will be megacrash this time, when the shit hits the fan.

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The government can now borrow at negative rates...no longer the cost of the borrowing but the large amount of the debt required...the cost payable is the time and the lack of freedom to move not the money.😉

 

 

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These low rates in the UK and globally are seriously frightening. A true indication of the economies and asset values hiding behind this QE push policy. 

Part of me thinks ‘we’ should all be taking advantage of this.....but the rest (95%) just feels like it’s a disaster waiting to happen. 
 

I guess it’s just a question of when....and that of course is the key question particularly because these rates are unprecedented. 

I guess to anyone buying a property (and I understand why some may not want to wait) all I would say is buy carefully, buy something you can stay in for many many years eg 20 and buy at a comparatively very very low number. And if you can’t follow that advice then expect the unexpected. 

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Let me rewrite this -

Demand for mortgages is at decades low.

Few houses are selling.

The cost of houses, relative to wages, is too high.

Too much debt, which has choked the economy. Debt deflation. Only way out is wage inflation and hpi falls.

I speak to comoanies that offer good wages relative to local incomes but are shit relative to local housing costs. They cannot recruit.

Hpi destroys economies, which will destroy hpi.

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I am taken aback as to how low mortgage rates are going. It does seem that a major deposit is how near giveaway rates are obtained, but even the 95% LTV rates are astounding value. Begs the question why though.

 

Lead answer there is of course that the wage to loan ratio is off the scale. Add in to that the difficulties of even raising a decent deposit and you have a high demand for houses that cannot be afforded by most wannabe home owners. 
 

There seems no imminent HPC in the offing, but there is an ominous   unafordability with house prices now. Our area is middle england desirable, properties go up for sale, and the sold sign usually goes up with it. Then the sold sign comes down, and goes back up, and comes back down, and goes back....... 
 

Makes me wonder how long it will be before a new government help to buy policy means that mortgages move into negative rate territory. Good 'ere 'innit..._

Edited by DiggerUK

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58 minutes ago, Pop321 said:

These low rates in the UK and globally are seriously frightening. A true indication of the economies and asset values hiding behind this QE push policy. 

Part of me thinks ‘we’ should all be taking advantage of this.....but the rest (95%) just feels like it’s a disaster waiting to happen. 
 

I guess it’s just a question of when....and that of course is the key question particularly because these rates are unprecedented. 

I guess to anyone buying a property (and I understand why some may not want to wait) all I would say is buy carefully, buy something you can stay in for many many years eg 20 and buy at a comparatively very very low number. And if you can’t follow that advice then expect the unexpected. 

We may see negative rates in future. QE and currency devaluation is the only way for countries to make debt cheaper as per our banking system. I bought in 2017 after 7 years wait as I got fed up. At the best we will see gradual stagnation or slow decline. Banks won't let the prices crash massively even with Corbyn as PM. Sudden crash will have wider implications not just house prices. If the money rotation in system crashes, it impacts every sector of economy. I fixed mine for lower rates for 5 years and overpaying 10% per year so that in 5 years, my debt will be much lower than it is now. Can't keep cash in savings / pension(wait till 75 to get it). 

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4 minutes ago, DiggerUK said:

Lead answer there is of course that the wage to loan ratio is off the scale.

Absolutely. It's not about house prices being multiples of your annual salary. It's mostly about whether you can afford the monthly payment. This is very bad way of lending. Cash has no value as time passes in this system. It's all rigged up and people have to defend themselves with their money invested carefully. Governbankment is for rich boys only. I am seeing same thing happening in divorce laws in family courts. Rich boys set the rules to control masses but they themselves can work around these rules. See how cleverly Tony Blair pays less than 2% taxes on his income. If an ordinary Joe do that, he will get a notice from HMRC. It's NEVER about equality. They turned the communities into just individuals who can barely defend themselves from financial slavery. It's not about right or wrong, its about defending yourselves and your family from wrong. Moral compass has been broken the day council houses were sold by Maggie at reduced prices. Council houses are state silver, they shouldn't have been privatised. Now they've monopolised cash value as well. Similar to what we've seen in Roman empire, systematic and steady controlling of masses who will be working all their lives while elite will be busy with gobbling up actual resources like land. Unless a totally outsider smashes this system, there is no way we can even think of putting our cash into savings account let alone investing in pensions and shares. See the big Pharma, big 4 energy companies, they've monopolised already.

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But surely if the price of everything else (Food, fuel, cars and assc. costs for example), keeps going up too, it doesn't matter how much QE banks print, people just won't be able to afford to pay a mortgage.

 

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46 minutes ago, Simhadri said:

Absolutely. It's not about house prices being multiples of your annual salary. It's mostly about whether you can afford the monthly payment. This is very bad way of lending. Cash has no value as time passes in this system. It's all rigged up and people have to defend themselves with their money invested carefully. Governbankment is for rich boys only. I am seeing same thing happening in divorce laws in family courts. Rich boys set the rules to control masses but they themselves can work around these rules. See how cleverly Tony Blair pays less than 2% taxes on his income. If an ordinary Joe do that, he will get a notice from HMRC. It's NEVER about equality. They turned the communities into just individuals who can barely defend themselves from financial slavery. It's not about right or wrong, its about defending yourselves and your family from wrong. Moral compass has been broken the day council houses were sold by Maggie at reduced prices. Council houses are state silver, they shouldn't have been privatised. Now they've monopolised cash value as well. Similar to what we've seen in Roman empire, systematic and steady controlling of masses who will be working all their lives while elite will be busy with gobbling up actual resources like land. Unless a totally outsider smashes this system, there is no way we can even think of putting our cash into savings account let alone investing in pensions and shares. See the big Pharma, big 4 energy companies, they've monopolised already.

Good post...

Look at it like this, we are all only here for a temporary amount of time...all have a date on our foreheads... doesn't matter who you are  health nor sanity can be bought....life, it is only a game, pieces on a chessboard.😉

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1 hour ago, spyguy said:

Let me rewrite this -

Demand for mortgages is at decades low.

Few houses are selling.

The cost of houses, relative to wages, is too high.

Too much debt, which has choked the economy. Debt deflation. Only way out is wage inflation and hpi falls.

I speak to companies that offer good wages relative to local incomes but are shit relative to local housing costs. They cannot recruit.

Hpi destroys economies, which will destroy hpi.

I have to have staff accommodation.

If the candidate does not already have a house locally they wont move for roles under 35/40k.

And even those folks want staff accommodation during the relocation phase.

To keep the place going out of 30-40 staff I need 6-10 units of staff accommodation.  Last years profits are going into expanding and improving the onsite accommodation.

The local folk are either retired in an expensive house or in social housing and not that interested in anything over 15 hours.

Huge gap 28-50 years old.

Wages are rising and applicants ghost all the time so it must be easy out there to get a job.

 

 

 

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2 hours ago, chronyx said:

But surely if the price of everything else (Food, fuel, cars and assc. costs for example), keeps going up too, it doesn't matter how much QE banks print, people just won't be able to afford to pay a mortgage.

 

Halifux will probably introduce a Help to Eat mortgage,  secured against your parents' kidneys.

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Just now, btd1981 said:

Halifux will probably introduce a Help to Eat mortgage,  secured against your parents' kidneys.

Jokes on them, I will just eat my parents:unsure:

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1 hour ago, winkie said:

Good post...

Look at it like this, we are all only here for a temporary amount of time...all have a date on our foreheads... doesn't matter who you are  health nor sanity can be bought....life, it is only a game, pieces on a chessboard.😉

I got a rude shock from paragon who forced me into IO mortgage with 25% deposit when I bought home recently. I called them after sale completed, requested them to move me into repaying mortgage from interest only. The lady on the phone told me being on IO mortgage, I will be charged at 4% for any overpayment of principal amount. I argued with her for 55 minutes and and she rejected moving my deal to repayment mortgage. Next day called again to customer care and the guy connected me to his account manager. I asked the manager how the ****** can you discourage your customers from paying off debt and forcing them onto IO mortgage. I told him its good for paragon itself to encourage their customers to pay off debt than defaulting in long term. His answer "You've no chance of defaulting as house prices, rents will beat your debt and interest in long term". This is from an account level manager. I told him I will switch my BTL deal to new lender. After 80 minutes of dillydallying, he finally agreed to move my deal onto repayment mortgage for ****** sake. As customer, I myself don't feel safe being stuck with IO mortgage, but these guys are confident that its worth  Its nuts for sure. Yes BTL is not great, but I don't to put my money into savings or pension or shares. I want something to hang on and pass it as a small asset to kids. My view is my kids should not suffer the poverty I suffered for 17 years since childhood. I rented out my property at 15% below the rent in the area because the tenants are a family who have 2 children. My house is in good catchment area, so I let to them. Deep in my heart I know I'm making it harder for a first time buyer but there was nobody to help me when I was struggling for 17 years. Its all about saving my own ass but yes I'm hypocritical. I've no other choice, can't risk my money anywhere else. I may be wrong but its about saving myself from worthless currency biting my back.

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4 hours ago, spyguy said:

Hpi destroys economies, which will destroy hpi.

In 2007 I was scared the collateral damage from GFC would be overkill.  Now I want it all to burn.

Protect yourself as much as you can but only a massive firestorm can undo the damage from HPI.

 

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2 hours ago, Simhadri said:

I got a rude shock from paragon who forced me into IO mortgage with 25% deposit when I bought home recently. I called them after sale completed, requested them to move me into repaying mortgage from interest only. The lady on the phone told me being on IO mortgage, I will be charged at 4% for any overpayment of principal amount. I argued with her for 55 minutes and and she rejected moving my deal to repayment mortgage. Next day called again to customer care and the guy connected me to his account manager. I asked the manager how the ****** can you discourage your customers from paying off debt and forcing them onto IO mortgage. I told him its good for paragon itself to encourage their customers to pay off debt than defaulting in long term. His answer "You've no chance of defaulting as house prices, rents will beat your debt and interest in long term". This is from an account level manager. I told him I will switch my BTL deal to new lender. After 80 minutes of dillydallying, he finally agreed to move my deal onto repayment mortgage for ****** sake. As customer, I myself don't feel safe being stuck with IO mortgage, but these guys are confident that its worth  Its nuts for sure. Yes BTL is not great, but I don't to put my money into savings or pension or shares. I want something to hang on and pass it as a small asset to kids. My view is my kids should not suffer the poverty I suffered for 17 years since childhood. I rented out my property at 15% below the rent in the area because the tenants are a family who have 2 children. My house is in good catchment area, so I let to them. Deep in my heart I know I'm making it harder for a first time buyer but there was nobody to help me when I was struggling for 17 years. Its all about saving my own ass but yes I'm hypocritical. I've no other choice, can't risk my money anywhere else. I may be wrong but its about saving myself from worthless currency biting my back.

A perfect example of how divide and rule works and works well.

To protect yourself and carve out a future you are forced into acting in a way that harms the interests of your allies and fellow travellers.

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2 hours ago, Simhadri said:

Yes BTL is not great, but I don't to put my money into savings or pension or shares. I want something to hang on and pass it as a small asset to kids. My view is my kids should not suffer the poverty I suffered for 17 years since childhood. I rented out my property at 15% below the rent in the area because the tenants are a family who have 2 children. My house is in good catchment area, so I let to them. 

Don't beat yourself up, you're not going to save the world mate - I think you made a very kind decision within your abilities and needs.

 

7 minutes ago, Bluestone59 said:

A perfect example of how divide and rule works and works well.

To protect yourself and carve out a future you are forced into acting in a way that harms the interests of your allies and fellow travellers.

Life in Britain innit! **** them before they **** you twice as hard.  And all it took was a world war, currency debasement and the individualisation of society.  

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6 hours ago, Bluestone59 said:

A perfect example of how divide and rule works and works well.

To protect yourself and carve out a future you are forced into acting in a way that harms the interests of your allies and fellow travellers.

Agree it's a jungle. Modern art of survival is about not moral, but about surviving perfectly in an imperfect world all of us created ourselves. I don't see any change in present system and it could get worse with China becoming world's largest economy and USA fading away slowly. We might see more despots coming to power in some EU countries in future. I hope UK remains democratic at least.

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10 hours ago, Simhadri said:

Yes BTL is not great, but I don't to put my money into savings or pension or shares. I want something to hang on and pass it as a small asset to kids. 

Why not a pension or shares, can I ask?  You can still pass them to your children??

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8 hours ago, msi said:

Protect yourself as much as you can but only a massive firestorm can undo the damage from HPI.

Or just a very, very long, slow process as per Japan, which is what I fear we are going to end up stuck in 😕

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13 minutes ago, scottbeard said:

Why not a pension or shares, can I ask?  You can still pass them to your children??

Pension age will rise. Banks want to lend us money to buy a house but not to buy shares. Because they know they can snatch your house back but your shares? Houses can be used by children to live with their family and extend them according to their taste but shares ? With steady population growth, resource contention will increase for land. Already big boys from america, malaysia scouting for large parcels of land in Scotland. So owning a house with a piece of land is good even incase of minerals being mined in future, you'll get good compensation. Also if currency is devalued with more QE, houses will gain some value from it. With shares, its sometimes needs more time to divest and reinvest. But with houses, I've estate agent managing it. So I'm not actively spending time on it daily. Government can put taxes on house income but in long term it may beat inflation if invested properly. My 2 cents.

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21 minutes ago, scottbeard said:

Or just a very, very long, slow process as per Japan, which is what I fear we are going to end up stuck in 😕

Japan's case is more painful as full time permanent jobs are completely destroyed and people no longer have a secure job to marry and start a family. We should NOT go for QE. Its race to bottom by destroying the value of wages while increasing opportunity for speculators like me.

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12 minutes ago, Simhadri said:

Already big boys from america, malaysia scouting for large parcels of land in Scotland.

Do you have any more on this?

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  • 295 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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