Monday, March 14, 2011
The only way is up, baby.
Nine in 10 homebuyers 'taking a gamble they can't afford to lose'
*Looks like my '9 out of 10 borrowers gamble on it being different this time' comment last week wasn't too far off the mark* 'Second, recent history strongly suggests that current mortgage costs are abnormally low. According to the Building Societies’ Association, variable rates averaged 5.3pc in the decade after 2000; 8.9pc in the 1990s; 12.5pc in the 1980s and 10.1pc in the 1970s. Third, many household’s biggest monthly outgoing is their mortgage. So, before anyone decides to bet that rates will remain at or near their historically abnormal current low levels, they should ask themselves whether this is a gamble they can afford to lose. Have the nine in 10 homebuyers currently opting for fixed rates done so? I wouldn’t bet on it.'
Posted by sibley's b'stard child @ 03:49 PM (2232 views)
7 thoughts on “The only way is up, baby.”
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mark wadsworth says:
G-d bless Ian Cowie and all who sail in him!
When I read “Telegraph” I assumed it’d be some Home-Owner-Ist drivel and assumed the headline said “Nine in 10 homebuyers ‘taking a gamble they can’t lose'” which is exactly what the government wants us to think.
jack c says:
Oh yes that market leading tracker and fix – “Both deals are available up to 65pc loan to value (LTV)” not to mention the associated fee which ranges upto £1499. I’d rather be in the boring 1 in 10 camp on this one.
mr g says:
And I bet 5 out of 10 homebuyers don’t know their ar*e from their elbow when it comes to understanding how interest rate rises will hit them.
drewster says:
There’s an old saying, “If you owe the bank £1million, you have a problem; if you owe the bank £1billion, the bank has a problem.”
That’s basically where we are with housing; only instead of the bank, it’s the population as a whole: “If you’re at risk of repossession, you have a problem. If three million people are at risk of repossession, the government has a problem.”
shipbuilder says:
A 2 or even 5 year fixed rate is as much of a gamble. Unless someone is offering 25 year fixed mortgages, the fixed vs variable rate debate is irrelevant.
Crunchy says:
5. shipbuilder
I think all mortgages should be fixed rate for 25 years using an average. It would go some way to stopping the shenanigans.
Crunchy says:
4. drewster said…There’s an old saying, “If you owe the bank £1million, you have a problem; if you owe the bank £1billion, the bank has a problem.”
~ Difficult to see who the hijacker is. I’m sure the culprit along with the victims will be revealed at the final point of impact.