msi Posted June 17, 2023 Share Posted June 17, 2023 1 hour ago, The Angry Capitalist said: Agree with this. I think this is what the political establishment is hoping for too. This is also why banks ask for deposits and with rising rates higher ones. If you have paid a £20,000 deposit or more of your hard earned money you will be very reluctant to walk away from your mortgage and default because you will lose that deposit. Therefore, the house price will have to lose market value in significant excess of that £20,000 deposit to tempt mortgage holders to give up. Let's say their house loses a nominal market vale of £30,000 2 years after they got the mortgage they will still be willing to continue making payments especially as many will think over a few years or sometime in the future the value will go back up. However, if their house p[rice value goes down say somewhere from £50,000 onward then it is close to a situation where they might want to give up and throw in the towel as that is a big drop and they are in too much negative equity. Even then in some case people will still be willing to carry on especially if they live in a nice house in a nice area and have a reasonably well paid enjoyable job etc. There is a lot of factors to account for but it will take a huge market drop for people to default. Also, many mortgages are less than £300,000 so a 20% drop in market value is £60,000 and they would have in all likelihood put at least a £30,000 deposit down. Bigger mortgages of £1 million or so might be a different matter. A 20% drop on a million pound property is £200,000 so we are in the realm of real money losses here. If people have leveraged on these types of mortgages then they might be more likely to default especially as their monthly payments will increase significantly In conclusion, most will just have a moan and carry on. They might not keep calm, however. Would you keep paying the Bank if .. ...it meant taking food off the table and going hungry ? ..it meant no heating? ..it meant your marriage breaks up and your partner gets the kids and the house? ..if you were laid off? Quote Link to comment Share on other sites More sharing options...
winkie Posted June 17, 2023 Share Posted June 17, 2023 2 hours ago, reddog said: My take is most people will do anything to keep their houses. The mortgage is probably the last bill they will stop paying. Therefore a cut in consumption is much more likely. Yes, the house they are living in and invested in with a fair deposit......they might just have to pull in their belts and battern down the hatches......but not someone renting when asked for more rent.....those in a good position will say 'thanks but no thanks' and find alternative cheaper accommodation, saving themselves a fortune, putting money by to buy later.....no gain without some pain, the party is over. Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted June 17, 2023 Share Posted June 17, 2023 6 minutes ago, msi said: Would you keep paying the Bank if .. ...it meant taking food off the table and going hungry ? ..it meant no heating? ..it meant your marriage breaks up and your partner gets the kids and the house? ..if you were laid off? I think generally mortgage holders have room to absorb higher mortgage costs. Some will have option to work more hours or get a second job etc. Some will have to forego holidays. Some will have to downsize vehicles. Sell the Range Rover. Get a Fiesta. However, if you have some statistics that tells us a lot of mortgage holders are already working 60 hours per week along with being highly leveraged and their monthly earnings are already leaving no money left after cost of living then provide them. Quote Link to comment Share on other sites More sharing options...
2023crash Posted June 17, 2023 Share Posted June 17, 2023 44 minutes ago, Lucando said: I wouldn't agree with this. The nominal drop on the more expensive property will be far greater than the drop on the lower value one. It should be a lot easier to upsize, which is what I will be doing I think the higher end of the market will fall further. With so many years of HPI it stands to reason that people have leveraged more to buy higher value property. Certainly we have seen higher end of market go further and further out of our reach. Know someone who bought in 2014 for 600k, invested 150-200k in it. Thinks it hit the 1M mark during COVID. Still over 400k in debt, huge mortgage costs now with rates around 6%. One job loss and that becomes a distressed sale... Quote Link to comment Share on other sites More sharing options...
Lucando Posted June 17, 2023 Share Posted June 17, 2023 2 minutes ago, 2023crash said: I think the higher end of the market will fall further. With so many years of HPI it stands to reason that people have leveraged more to buy higher value property. Certainly we have seen higher end of market go further and further out of our reach. Know someone who bought in 2014 for 600k, invested 150-200k in it. Thinks it hit the 1M mark during COVID. Still over 400k in debt, huge mortgage costs now with rates around 6%. One job loss and that becomes a distressed sale... Yep, and even the £600k purchase in 2014 was probably overpriced and inflated due to ZIRP. They should have let things run its course after the GFC. All that is happening now is the inevitable play out of what should have happened then but didn't because they dropped the interest rates and QE. The plates have now stopped spinning. Quote Link to comment Share on other sites More sharing options...
Insane Posted June 17, 2023 Share Posted June 17, 2023 25 minutes ago, 2023crash said: I think the higher end of the market will fall further. With so many years of HPI it stands to reason that people have leveraged more to buy higher value property. Certainly we have seen higher end of market go further and further out of our reach. Yes the further up the market you go the fewer people there are in that bracket and the fusser they become. If you have a nice 4 bed detached and there are 4 people in your family you don't have to move up to that 5 or 6 bedder, it is not essential. I live in Essex, every so often I will pop on Rightmove and take a look at the expensive houses in Chigwell. Sometimes you see the same houses up for sale, some have been on there for years. They come on and off the market but don't sell. There is one I noticed recently that was on at £5.5 million was withdrawn and then relisted at £4.5 million. The running costs of these places must be huge. Someone once described them not as houses but museums. Quote Link to comment Share on other sites More sharing options...
sambino Posted June 17, 2023 Share Posted June 17, 2023 Best decision I made last year was to fix for 5 years. I knew the exact date I could start looking and put the deal in place 6 months before the expiry date, and sat and watched the rates go up. Also did it all myself and stayed with the same provider so no fee, the ones coming off fixed term deals will also need to find the fee or add it on to the mortgage. I might loose out in a couple of years but think the higher IRs are in for the long term. Quote Link to comment Share on other sites More sharing options...
sambino Posted June 17, 2023 Share Posted June 17, 2023 Best decision I made last year was to fix for 5 years. I knew the exact date I could start looking and put the deal in place 6 months before the expiry date, and sat and watched the rates go up. Also did it all myself and stayed with the same provider so no fee, the ones coming off fixed term deals will also need to find the fee or add it on to the mortgage. I might loose out in a couple of years but think the higher IRs are in for the long term. Quote Link to comment Share on other sites More sharing options...
sambino Posted June 17, 2023 Share Posted June 17, 2023 Best decision I made last year was to fix for 5 years. I knew the exact date I could start looking and put the deal in place 6 months before the expiry date, and sat and watched the rates go up. Also did it all myself and stayed with the same provider so no fee, the ones coming off fixed term deals will also need to find the fee or add it on to the mortgage. I might loose out in a couple of years but think the higher IRs are in for the long term. Quote Link to comment Share on other sites More sharing options...
Smith Posted June 17, 2023 Author Share Posted June 17, 2023 1 hour ago, The Angry Capitalist said: I think generally mortgage holders have room to absorb higher mortgage costs. Some will have option to work more hours or get a second job etc. Some will have to forego holidays. Some will have to downsize vehicles. Sell the Range Rover. Get a Fiesta. However, if you have some statistics that tells us a lot of mortgage holders are already working 60 hours per week along with being highly leveraged and their monthly earnings are already leaving no money left after cost of living then provide them. Some are in this position. But "generally"? I'm not so sure. Suspect a lot of people are living up to their means already, without the luxuries. Quote Link to comment Share on other sites More sharing options...
winkie Posted June 17, 2023 Share Posted June 17, 2023 2 hours ago, msi said: Would you keep paying the Bank if .. ...it meant taking food off the table and going hungry ? ..it meant no heating? ..it meant your marriage breaks up and your partner gets the kids and the house? ..if you were laid off? Yes..... I did late 80s early 90s.....did what millions do today, avoid putting on the heating, going to bed early, luckily out at work all day so got free heat there......stopped eating out, fewer takeaways, no holidays..... didn't do me no harm......young so easier. Quote Link to comment Share on other sites More sharing options...
fellow Posted June 17, 2023 Share Posted June 17, 2023 (edited) 1 hour ago, sambino said: Best decision I made last year was to fix for 5 years. I knew the exact date I could start looking and put the deal in place 6 months before the expiry date, and sat and watched the rates go up. Also did it all myself and stayed with the same provider so no fee, the ones coming off fixed term deals will also need to find the fee or add it on to the mortgage. I might loose out in a couple of years but think the higher IRs are in for the long term. That was a triple good decision. Edited June 17, 2023 by fellow Quote Link to comment Share on other sites More sharing options...
TenYearToGetMyMoneyBack Posted June 17, 2023 Share Posted June 17, 2023 6 hours ago, Gawdon Bwown said: Do we know each other ? I actually only paid £40 for the allegro but the new clutch it needed to be driven and a couple of tyres was another £80. Only if you are called Nick F....... I was half expecting @Frugal Git to come back with a comment like yours. I know someone else who drove an Allegro in the 1990s but that was actually her inheritance. Back on topic maybe it will become worthwhile again to fit a new clutch in a 15 year old car. I sincerely hope the Government doesn't do something stupid like the 2009 car scrappage scheme which led to perfectly serviceable 11 year old cars being scrapped (the rules meant that the people most likely to make use of it were well off and thinking of changing their car anyhow). Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted June 17, 2023 Share Posted June 17, 2023 2 hours ago, Smith said: Some are in this position. But "generally"? I'm not so sure. Suspect a lot of people are living up to their means already, without the luxuries. If that't the case then we are in for a lot of chaos. Quote Link to comment Share on other sites More sharing options...
Jason Posted June 17, 2023 Share Posted June 17, 2023 Luckily I fixed at 2.89% last year for 5 years. I keep reminding the missus we need to save* £600 a month for the next four years to ensure the monthly payments stay the same when we remortgage in 2027**. *savings rates being higher, it's worth us doing that rather than overpaying the mortgage. ** I fully expect rates to be around 5% ish then, with mortgage rates around 5-6%. Quote Link to comment Share on other sites More sharing options...
Orb Posted June 17, 2023 Share Posted June 17, 2023 Pardon my ignorance, for I didn't read the article, but the £250 pcm extra.... is that not on top of the hundreds already added on top since mortgage rates began rising? Quote Link to comment Share on other sites More sharing options...
clarkey Posted June 17, 2023 Share Posted June 17, 2023 1 hour ago, Orb said: Pardon my ignorance, for I didn't read the article, but the £250 pcm extra.... is that not on top of the hundreds already added on top since mortgage rates began rising? I am not fully sure where this figure is arrived at , it’s going to different from mortgage to mortgage and depends on what you have got left to pay surely Quote Link to comment Share on other sites More sharing options...
DarkHorseWaits-NoMore Posted June 17, 2023 Share Posted June 17, 2023 Sorry, that debt is no longer sustainable, at 61 you left it too late and financially, you are screwed! Quote Eleanor Adair, from Bangor, County Down outside Belfast, has seen her mortgage costs soar from around £450 to £1,260 a month over the last year and a half. She is on a variable rate mortgage which is almost entirely interest-only to keep costs down, The 61-year-old, who is disabled, said she was now having to work Saturday mornings on top of her full-time hours as an administrator to pay the bills. https://www.bbc.co.uk/news/business-65925224 Quote Link to comment Share on other sites More sharing options...
reddog Posted June 17, 2023 Share Posted June 17, 2023 50 minutes ago, DarkHorseWaits-NoMore said: Sorry, that debt is no longer sustainable, at 61 you left it too late and financially, you are screwed! Yeah but I find it interesting that as a disabled 61 year old, she would rather take a second job, than give up on the status of "home owner". Goes back to what I said, the mortgage is the last bill people will stop paying. Quote Link to comment Share on other sites More sharing options...
PeanutButter Posted June 17, 2023 Share Posted June 17, 2023 2 hours ago, DarkHorseWaits-NoMore said: Sorry, that debt is no longer sustainable, at 61 you left it too late and financially, you are screwed! She’s not going to last the next 6mo Quote Link to comment Share on other sites More sharing options...
regprentice Posted June 17, 2023 Share Posted June 17, 2023 13 hours ago, TenYearToGetMyMoneyBack said: So less than £250 a month. The way some people were going on I thought it would be closer to £1000. £250 is probably the difference in PCP payments on a Dacia and an Audi. "Cut your cloth" etc I've been on a gas and electricity fix for 2 years so not seen the current high prices. ive just had my "time to renew" email today. Some people will be rolling off their mortgage and their fuel fix and for those people it could be closer to £5k a year. Time to renegotiate your leased car? mobile contract, car/house insurance, sky contract, broadband? everything is going up Most people will have 1,2 or 2 of these things and more spaced out.... but some people are going to be hit massively by a lot of debt/contract renegotiation at once and if thats just now its could be a perfect storm. Quote Link to comment Share on other sites More sharing options...
clarkey Posted June 17, 2023 Share Posted June 17, 2023 3 hours ago, DarkHorseWaits-NoMore said: Sorry, that debt is no longer sustainable, at 61 you left it too late and financially, you are screwed! Surely she would be better off selling the place , renting somewhere and jacking the job in and letting housing benefit take the strain doubt she would be any worse off Quote Link to comment Share on other sites More sharing options...
msi Posted June 17, 2023 Share Posted June 17, 2023 8 hours ago, winkie said: Yes..... I did late 80s early 90s.....did what millions do today, avoid putting on the heating, going to bed early, luckily out at work all day so got free heat there......stopped eating out, fewer takeaways, no holidays..... didn't do me no harm......young so easier. World of difference between forgoing a takeaway and telling your kids to go to bed early and put double pjs on, as there is no dinner and no heat. ....I speak from experience.. Quote Link to comment Share on other sites More sharing options...
dirtysteve Posted June 17, 2023 Share Posted June 17, 2023 If I had to remortgage now mine would go up £16,000/yr. Luckily I’m fixed at 1.3% until March 26. Quote Link to comment Share on other sites More sharing options...
winkie Posted June 18, 2023 Share Posted June 18, 2023 8 hours ago, msi said: World of difference between forgoing a takeaway and telling your kids to go to bed early and put double pjs on, as there is no dinner and no heat. ....I speak from experience.. No heat one thing no dinner is cruelty, ignorance or other health/adiction issues......anyone with kids would feed them first before ANYTHING. Quote Link to comment Share on other sites More sharing options...
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