Mumsnet bricking it over interest rates

[Chunketh]

33 minutes ago, Lagarde's Drift said:

Hehe the key is in your statement. People of modest means aren't wealthy. 🥰

Not true. Have a read of the millionaire next door.

[TenYearToGetMyMoneyBack]

2 hours ago, satsuma said:

Ive heard this sort of thing go on in England and knowing some English relatives I can confirm they are very very snooty.  Of course proper money people don't care about this stuff.

I live near a lot of £1million + houses (closer to the beach than me) and I have noticed the number of good condition fifteen year old Fiestas etc parked outside. There again the owners probably paid £50000 for the house 40 years ago. Until recently, when the houses reach probate they often get demolished and replaced by some Architect designed fashion statement with a Tesla outside. It will be interesting to see if that continues to happen.

[Lagarde's Drift]

38 minutes ago, Chunketh said:

Not true. Have a read of the millionaire next door.

You mean those of modest spending habits may be wealthy, not those of modest means.

[Lucky Larry]

 

[hotblack42]

Returning to the topic..

The over-leveraged with surplus income need to bite the bullet and overpay their current fixed as if they have already re-mortgaged.

Example:

£300,000 mortgage at 1.5% fixed for 3 more years, 30 year term.

Payments £1,035.36 pcm

Increasing that to £1,500 will result in c. £45,000 being taken off the principal rather than £27,000.

Revert/Remortgage to 6% in 3 years.

Payments now go from £1500 to £1591, not £1035 to £1703.  And they have £18k more equity.

Easy.  Why are they bricking it?

 

 

Edited September 30, 2022 by hotblack42
clarify

[Odysseus]

10 minutes ago, Lucky Larry said:

 

I watched this while punching myself in the gonads because it was less painful and distracting. 
 

if they’re offering you 10.5% they don’t want your business you mug. 
 

to add the financial illiteracy of the general population and even the experts is mind blowing. I wonder how these people tie their shoelaces.

Edited September 30, 2022 by Odysseus

[Thomas Hearns]

5 minutes ago, Lucky Larry said:

 

Not sure where she's getting such terrible rates... I'm still seeing under 5% with even poor ltv's. 

 

however  someone I follow posted this on SM.

[hotblack42]

10 minutes ago, Lucky Larry said:

 

Risk now priced correctly.

[hotblack42]

2 minutes ago, Odysseus said:

if they’re offering you 10.5% they don’t want your business you mug. 

Oh they want it.  10.5%, nicely hedged.  Lovely jubbly, farm the sheeple.

[dpg50000]

13 minutes ago, Lucky Larry said:

 

 

Hmmm.... wonder why none of the panel probed even slightly deeper, i.e. how much deposit is she putting down, Loan to income ratio, have they tried any other lenders etc. Instead, they're all shaking their heads and pretending to care.

[shlomo]

5 minutes ago, Odysseus said:

I watched this while punching myself in the gonads because it was less painful and distracting. 
 

if they’re offering you 10.5% they don’t want your business you mug. 
 

to add the financial illiteracy of the general population and even the experts is mind blowing. I wonder how these people tie their shoelaces.

She does not understand how lucky she is, she has just dodged a bullet 

[TheResponsibleHouseBuyer]

6 minutes ago, dpg50000 said:

 

Hmmm.... wonder why none of the panel probed even slightly deeper, i.e. how much deposit is she putting down, Loan to income ratio, have they tried any other lenders etc. Instead, they're all shaking their heads and pretending to care.

I think there is only so much they can do/ask on BBC QT without breaching some sort of privacy. Either that or they just have to cater to the 'average joe's intelligence'.

Wasn't there a mortgage broker who was talking about it in the audience? He should have been more vocal.

10% mortgage just seems off completely. Something definitely in her personal finances or something causing it.

[winkie]

......a lender quoting 10% for a mortgage means we are not lending at the moment.....waiting for the dust to settle, bear with us......like someone saying they want £300k for a £200k house....it is not for sale.

[Chunketh]

48 minutes ago, Lagarde's Drift said:

You mean those of modest spending habits may be wealthy, not those of modest means.

Both. If you can save half of what you earn you are wealthy.

Its true to a point, but obviously becomes a lot harder if you are struggling. 

[Lagarde's Drift]

5 minutes ago, Chunketh said:

Both. If you can save half of what you earn you are wealthy.

Its true to a point, but obviously becomes a lot harder if you are struggling. 

I disagree. If you are on double minimum wage and save half of it you are still rather poor. Tough news but true in my opinion. 

I think you are thinking of people with the opportunity to become wealthy ie those on the higher tax rate. Those on the basic rate have really only gotten wealthy through leverage, speculation or just fake wealth through debt.

[hotblack42]

The over leveraged with several years to go on a cheap fixed mortgage could also invest £500pcm in a regular savings account.  Probably even better than overpaying with rising rates.

The key is accepting that the ship has sailed on the cushy lifestyle they thought they had (but never really had).

[winkie]

 

[Thomas Hearns]

28 minutes ago, Lagarde's Drift said:

I disagree. If you are on double minimum wage and save half of it you are still rather poor. Tough news but true in my opinion. 

I think you are thinking of people with the opportunity to become wealthy ie those on the higher tax rate. Those on the basic rate have really only gotten wealthy through leverage, speculation or just fake wealth through debt.

We couldn't live comfortably if we saved 50% of our earnings. Gross HH income of £80k, net HH income is about £4850pm after pension contributions. We're doing well if we save £800pm. We have 2 cars, 2 kids and a dog.

Mortgage is now £530, childcare £200, Car loan £250 (2.7%), council tax £150, gas, water, electric, internet £300, food/shopping £600. Petrol £250. Total £2280.

Add in things like TV license, car insurance, car tax, Netflix, mobile sims, clothing. Entertaining kids. Easily another £600pcm. TOTAL £2880. 

 

That leaves £1970 save £800. Remaining £1170 between 2 adults to freely spend.....

It's only £140 each per week for hobbies and leisure. I think the average HH needs over £100k to be able to live comfortably, haven't factored things in like house repairs. Car servicing, repairs, holidays birthdays and xmas. Inflation has eroded middle earners living standards over the last 20 years.

[TheResponsibleHouseBuyer]

14 minutes ago, Thomas Hearns said:

We couldn't live comfortably if we saved 50% of our earnings. Gross HH income of £80k, net HH income is about £4850pm after pension contributions. We're doing well if we save £800pm. We have 2 cars, 2 kids and a dog.

Mortgage is now £530, childcare £200, Car loan £250 (2.7%), council tax £150, gas, water, electric, internet £300, food/shopping £600. Petrol £250. Total £2280.

Add in things like TV license, car insurance, car tax, Netflix, mobile sims, clothing. Entertaining kids. Easily another £600pcm. TOTAL £2880. 

 

That leaves £1970 save £800. Remaining £1170 between 2 adults to freely spend.....

It's only £140 each per week for hobbies and leisure. I think the average HH needs over £100k to be able to live comfortably, haven't factored things in like house repairs. Car servicing, repairs, holidays birthdays and xmas. Inflation has eroded middle earners living standards over the last 20 years.

Interesting breakdown. I am no where near your earnings/outgoings but from what you have there looks like a typical UK family. 

Agree 100k is a safe bet if you want to live comfortable and within your means.

Just goes to show how stagnant wages and hidden inflation has ******ed us all over the years.

I give an example of my trips to 'developing countries' over the years. A decade ago, i would go there and be able to live a comfortable life as their living standards were pretty poor. Old houses, cheap food, cheap petrol etc.

I go there today and the locals are earning more than me and feel happier than ever. There has been significant investment in infrastructure, education, healthcare and open spaces.

UK just feels its been in decline because every government/administration just syphons the wealth out of the country.

Edited September 30, 2022 by TheResponsibleHouseBuyer

[nero120]

21 minutes ago, Thomas Hearns said:

childcare £200

 I only have one child and our nursery fees are over a grand a month!

[Clarky Cat]

35 minutes ago, Thomas Hearns said:

We couldn't live comfortably if we saved 50% of our earnings. Gross HH income of £80k, net HH income is about £4850pm after pension contributions. We're doing well if we save £800pm. We have 2 cars, 2 kids and a dog.

Mortgage is now £530, childcare £200, Car loan £250 (2.7%), council tax £150, gas, water, electric, internet £300, food/shopping £600. Petrol £250. Total £2280.

Add in things like TV license, car insurance, car tax, Netflix, mobile sims, clothing. Entertaining kids. Easily another £600pcm. TOTAL £2880. 

 

That leaves £1970 save £800. Remaining £1170 between 2 adults to freely spend.....

It's only £140 each per week for hobbies and leisure. I think the average HH needs over £100k to be able to live comfortably, haven't factored things in like house repairs. Car servicing, repairs, holidays birthdays and xmas. Inflation has eroded middle earners living standards over the last 20 years.

Thanks for some figures. Someone could quite easily have been offered a mortgage of £360,000 based on your income in late 2021, after all repayments would only be £1150 on a 30 year at 1%.  So only 24% of take home going on the mortgage and £1350 spare if not saving.

You can easily see how this is a problem as with your figures, coming off a 2 year fix next year to a rate of 7% will lead to repayments of £2400, so only £100 spare per month. 

Added - even a rate of 5.5%, i.e based on current Nationwide rates gives repayments of £2200, so still a rough doubling and £300 spare per month. No room for manoeuvre already. No wonder people are worried.

Edited September 30, 2022 by Clarky Cat

[debtslave]

52 minutes ago, hotblack42 said:

The over leveraged with several years to go on a cheap fixed mortgage could also invest £500pcm in a regular savings account.  Probably even better than overpaying with rising rates.

The key is accepting that the ship has sailed on the cushy lifestyle they thought they had (but never really had).

This is my plan. I have just over 4 years left on a fixed rate of 1.18%.

If I stash £200+pcm in a regular saver I can bring down the mortgage to £140k at the end of the fix. joint income is £55k so this should be just about manageable even if rates are 10%.

 

 

 

 

[Chunketh]

1 hour ago, Lagarde's Drift said:

I disagree. If you are on double minimum wage and save half of it you are still rather poor. Tough news but true in my opinion. 

I think you are thinking of people with the opportunity to become wealthy ie those on the higher tax rate. Those on the basic rate have really only gotten wealthy through leverage, speculation or just fake wealth through debt.

If you save half your take home you can be financially independent in 16 years.

that’s wealth 

[Lagarde's Drift]

34 minutes ago, Thomas Hearns said:

We couldn't live comfortably if we saved 50% of our earnings. Gross HH income of £80k, net HH income is about £4850pm after pension contributions. We're doing well if we save £800pm. We have 2 cars, 2 kids and a dog.

Mortgage is now £530, childcare £200, Car loan £250 (2.7%), council tax £150, gas, water, electric, internet £300, food/shopping £600. Petrol £250. Total £2280.

Add in things like TV license, car insurance, car tax, Netflix, mobile sims, clothing. Entertaining kids. Easily another £600pcm. TOTAL £2880. 

 

That leaves £1970 save £800. Remaining £1170 between 2 adults to freely spend.....

It's only £140 each per week for hobbies and leisure. I think the average HH needs over £100k to be able to live comfortably, haven't factored things in like house repairs. Car servicing, repairs, holidays birthdays and xmas. Inflation has eroded middle earners living standards over the last 20 years.

Your post is why people have voted Brexit and Tory cos they are being left behind. Try living on 2x 25k, or gasp, 1x 17k income with a family. You are only just feeling the edge of the iceberg that is the lack of levelling up. 

Some HPCers will tell you to walk everywhere and eat gravel for breakfast and you'll be rich. It's nonsense.

[satsuma]

2 minutes ago, Lagarde's Drift said:

Your post is why people have voted Brexit and Tory cos they are being left behind. Try living on 2x 25k, or gasp, 1x 17k income with a family. You are only just feeling the edge of the iceberg that is the lack of levelling up. 

Some HPCers will tell you to walk everywhere and eat gravel for breakfast and you'll be rich. It's nonsense.

Hard to believe people are not happy with over £1100 in the house to splurge, after paying everything and putting a bit away.  I assume the poster is female=never f4cking happy?