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Bingley Bloke

70% Mortgage Repayment Rise On The Cards For Some...

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And if current mortgage costs are 44% of take home pay thats gotter hurt?

As much as 44 per cent of the income of many families is now being swallowed up by mortgage costs, pushing household budgets into the red

SB

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The fifth bank rate rise in less than a year has left some homeowners approaching the end of two-year fixed-rate mortgage deals staring at a 70% increase in monthly payments.

IMO, when Melissa Greenspan (Big Al's grand daughter) supposedly said recently:

this house price thing is so, like, over
.

We can take it that the carnage is about to begin. With massive increases in mortgages the sheeple no longer have easy credit to turn to for further loans to pay for the loans they can no longer afford. MEW is no longer much of an option now. I would say the miracle died recently.

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And if current mortgage costs are 44% of take home pay thats gotter hurt?

SB

44%? Sounds a bit light to me. With many on average earnings borrowing 200k for their starter bed-sit I would imagine 60-70% is more like it (after council taxes etc.).

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And if current mortgage costs are 44% of take home pay thats gotter hurt?

SB

Yes I agree it will cause a lot of pain

Well that is the gamble one takes when taking on a mortgage.

I thought long and hard about this and decided it was worth the risk. I have had 4 good years as far as interest rates are concerned so I expect a few bad ones to go with it, and so should everyone else.

The trick which most short sighted homeowners seem to be missing is the importance of saving during the good times. Even when inflation was lower, allegedly, during the first part of the year savings were still down. Proof that the majority of homeowners are not preparing for the large increase that will hit them hard when their fixed rates end.

If you can't take the pain then don't play the game.

You may have guessed I am a mortgage masochist. Raise the interest rates and give me more pain in August and again in October.

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The trick which most short sighted homeowners seem to be missing is the importance of saving during the good times.

Gordon Brown seems to have missed that trick too. :lol:

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http://www.guardian.co.uk/leaders/story/0,,2119885,00.html

Leader
Friday July 6, 2007
The Guardian
......./
An increase in rates is obviously good news for savers, and those who have sat out the Great British Debt Party. Yet the
credit splurge is now into record territory
, with economists at PWC calculating that 19% of our disposable income goes towards paying off debts. That is
above the level it reached in 1990
, and leaves rate-setters with the problem that if they go along with calls to push rates to 6% or above, more than a few borrowers will struggle to keep pace with the loan-repayment treadmill.
There are also specific areas of acute stress. Some people may have gone deep into debt to get a foot on the housing ladder, and the Woolwich this week reported that first-time buyers in parts of London are paying half their salaries in mortgage charges.
There are also over 2m homeowners on fixed-rate loans which expire over the next 18 months
; a lot of these will be downing all five rate hikes in one big gulp. A big feature of this boom has been the democratisation of debt, with those less well-off able to borrow more easily than ever before. Experian, consultants to many credit-card firms, forecasts that some of the poorest social groups will be hardest hit by these rises.
...../

We are on the exact same path as our mirror market in the US. Sub-prime is hurting those who are the poorest and whose desire to get on the "ladder" forced them into shylock loans. IO, 120%, low intro rates etc. are all going to come home to roost in the coming days and weeks. As the leader in the Guardian says--it is worse this time.

The miracle economy, Gordon's "no more boom and bust" (just boom), has been a disaster, mostly for the less well-off and the millions who got sucked into BTL as an alternative pension scheme.

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Guest d23
With massive increases in mortgages the sheeple no longer have easy credit to turn to for further loans to pay for the loans they can no longer afford. MEW is no longer much of an option now. I would say the miracle died recently.

seems IR's are having an effect after all

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