It’s almost as if encouraging people to take on massive amounts of debt to pay for overpriced housing wasn’t a sensible way to grow an economy.
>Of the 2.1 million mortgage holders in London and the South-East, around 27 per cent — more than one in four…
Cheers, couldn’t have done the maths on that one myself.
I find it amazing that the financial institutes seem to be incapable of regulation. I went through this in 1989. The interest rates went from about 5% to 15% overnight. Millions lost their homes. The only reason we didn’t was because we paid 4 months of mortgages on our credit cards then when they were maxed we took the keys to the building society and said “here you go, we can’t afford it any more here’s the keys”. Luckily by that time the banks and building societies had thousands of homes where people had done that over the previous months and they couldn’t sell them because – shock horror – nobody could afford the interest payments.
So by that time they were just reducing payments and lengthening the mortgage term to recoup their money.
The same thing happened in 2008 or 9 and now again.
The problem is that these sharks don’t want to listen to history. They think they can manage it better so they don’t learn. The original financiers have retired and the youngsters haven’t experienced it before so they keep repeating past mistakes.
I would never buy if I was young today. It’s a mugs game now.
To afford the astronomical house prices people now have hundreds of thousands of pounds in debt over 30-40 year mortgages. You are not going to go that length of time without considerable fluctuation of interest rates. Buying at record high prices with historical low interest rates with a budget that can’t handle interest rates going up means you can’t afford that house, even though the banks will happily hand over the cash.
I don’t fully understand interest rate changes. I am aware this will cause people to default on payments and potentially destabilise the housing market, but what does this mean for me, who rents, and was hoping to buy a house in the next 6 ish months?
Bought our first house in December and my partner wanted a mortgage term of 2y, I pushed for 5. Hoping we made the right decision.
There’s going to be more homelessness, more starvation, more deaths and more suicides. But the Tories aren’t bothered about that. They want the vulnerable to die.
Was on 2.5% 2 year fixed thats ends in november, best were currently looking at is an extra 1%
i just fixed my mortgage for 10 years at a 2.8% rate. Was wondering if fixing in for 10 years was too long but time will tell. It looks like it is going to be a good decision for the next year or 2 at least
In the process of buying a house
It’s fucking taking for ever and the mortgage offer is going to expire, it’s going to cost me £20k just because the solicitors take fucking weeks to reply to each other.
Just locked mine in for another five years. Went up about £50 a month compared to our current rate but figure it’ll only get worse in a few months time.
Wait. I’m no economics expert but, could this actually potentially cause a housing crash? If homeowners can’t afford to pay the mortgage, they’d probably just sell up, right?
Remortgaged last year for 5 years, i was thinking about going to 2 years and seeing what happens. Glad i didn’t… we’re on 1.84% and the best i can find anywhere now is 3.26%. We have a decent LTV too. It’s mental.
If someone bought their home 5 years ago I’m sure the increase in their homes value and rental prices will more than cover higher interest rates.
We are facing a debt time bomb from stupidly large mortgages to stupid in general student loans. Thus showing building an economy on debt and land lords is a very backwards idea.
I heard a mortgage advisor saying that they had stopped one of the stress tests for getting a mortgage where they see if you can afford and interest rate hike of 2 or 3 %.
He said ‘we don’t need to do that because everyone is on a fixed interest mortgage deal and when it runs out they get another one so its ok’
Fook me, when I got my mortgage got the advisor to work out how much it would be at 17% when he laughed and said that would never happen i told him my parents were at that at one point in the 70s or 80s.
Anyway I could could afford it at that still so it was all good.
Which means a hike one rents because that’s just what we do, pass the cost on down.
I don’t know why people are saying buying is a mugs game.
I spent ten years renting paying someone else’s mortgage.
I’ve spent the last three chipping away at a loan on an asset that has gone up
A third in value.
Tell me where you can get an appreciation in an asset or investment like that other than property?
Why pay a mortgage when you can pay somebody else’s mortgage and more to live in the property they haven’t even paid off?
just about to get a mortgage just over 4%, fixed for 5 years, 40 years term. Time to tighten the belt.
You know what pisses me off?
People could have been sensible and fixed years back, but their fixes are expiring now or in the next year or so and suddenly they’re having to face the interest rate rises purely down to a timing issue.
Other people conveniently had their fix expire around 6-9 months ago and got much better rates when they refixed.
Even better: people could have been on a SVR for the last X years so weren’t locked into anything and were then able to fix just before the rate rises.
So many people are going to be thousands of pounds worse off than others through no fault of their own. So frustrating.
I know people who have mortgages that are well over £300,000 for small tiny “newly built” tin pot houses. Market is gonna crash and burn again.
With how the rich are buying up property, this seems like it’s engineered to do exactly what it will cause, mass sell off of houses/defaults. The rich cash buyers swoops in and buys them up, rents them out at extortionate rates, but since the alternative is a ridiculous mortgage, they have to pay or go homeless…
Once again, this benefits only the rich.
I don’t want a revolution, no one wants to live through those times. I just wish the rich felt the same.
A basic one bedroom should be free for everyone in this country, one of the richest in the world. Homelessness should not exist in society and there should always be a safety net for those priced out of the market.
The idea of a ‘fixed’ mortgage being only 2-10 years seems so crazy to me. I’m in the US (I’m British) and the standard mortgage here is 30 year fixed. I’m fixed at 2.6% for the next 30 years, which is insane. My mortgage payment will be the same in 2050 as it is today.
People don’t seem to understand that we’re at historic lows, and typically speaking, central banks don’t want ultra low rate environments as it lessens the ability to stimulate the economy when things go bad. Anyone who thinks that this might just be a blip and they’ll get back to a 1-2% ‘fixed’ rate any time soon are nuts.
If you can’t handle rates of under 2% you’re clearly overstretched, we’re going to see loads of people going bankrupt by being overburdened by credit cards, loans, their fancy new lease cars and unmanageable mortgage payments
It’s been a ticking time bomb for ages, and rates are extremely low, wait until they get to even 5% let alone 10% or higher.
26 comments
It’s almost as if encouraging people to take on massive amounts of debt to pay for overpriced housing wasn’t a sensible way to grow an economy.
>Of the 2.1 million mortgage holders in London and the South-East, around 27 per cent — more than one in four…
Cheers, couldn’t have done the maths on that one myself.
I find it amazing that the financial institutes seem to be incapable of regulation. I went through this in 1989. The interest rates went from about 5% to 15% overnight. Millions lost their homes. The only reason we didn’t was because we paid 4 months of mortgages on our credit cards then when they were maxed we took the keys to the building society and said “here you go, we can’t afford it any more here’s the keys”. Luckily by that time the banks and building societies had thousands of homes where people had done that over the previous months and they couldn’t sell them because – shock horror – nobody could afford the interest payments.
So by that time they were just reducing payments and lengthening the mortgage term to recoup their money.
The same thing happened in 2008 or 9 and now again.
The problem is that these sharks don’t want to listen to history. They think they can manage it better so they don’t learn. The original financiers have retired and the youngsters haven’t experienced it before so they keep repeating past mistakes.
I would never buy if I was young today. It’s a mugs game now.
To afford the astronomical house prices people now have hundreds of thousands of pounds in debt over 30-40 year mortgages. You are not going to go that length of time without considerable fluctuation of interest rates. Buying at record high prices with historical low interest rates with a budget that can’t handle interest rates going up means you can’t afford that house, even though the banks will happily hand over the cash.
I don’t fully understand interest rate changes. I am aware this will cause people to default on payments and potentially destabilise the housing market, but what does this mean for me, who rents, and was hoping to buy a house in the next 6 ish months?
Bought our first house in December and my partner wanted a mortgage term of 2y, I pushed for 5. Hoping we made the right decision.
There’s going to be more homelessness, more starvation, more deaths and more suicides. But the Tories aren’t bothered about that. They want the vulnerable to die.
Was on 2.5% 2 year fixed thats ends in november, best were currently looking at is an extra 1%
i just fixed my mortgage for 10 years at a 2.8% rate. Was wondering if fixing in for 10 years was too long but time will tell. It looks like it is going to be a good decision for the next year or 2 at least
In the process of buying a house
It’s fucking taking for ever and the mortgage offer is going to expire, it’s going to cost me £20k just because the solicitors take fucking weeks to reply to each other.
Just locked mine in for another five years. Went up about £50 a month compared to our current rate but figure it’ll only get worse in a few months time.
Wait. I’m no economics expert but, could this actually potentially cause a housing crash? If homeowners can’t afford to pay the mortgage, they’d probably just sell up, right?
Remortgaged last year for 5 years, i was thinking about going to 2 years and seeing what happens. Glad i didn’t… we’re on 1.84% and the best i can find anywhere now is 3.26%. We have a decent LTV too. It’s mental.
If someone bought their home 5 years ago I’m sure the increase in their homes value and rental prices will more than cover higher interest rates.
We are facing a debt time bomb from stupidly large mortgages to stupid in general student loans. Thus showing building an economy on debt and land lords is a very backwards idea.
I heard a mortgage advisor saying that they had stopped one of the stress tests for getting a mortgage where they see if you can afford and interest rate hike of 2 or 3 %.
He said ‘we don’t need to do that because everyone is on a fixed interest mortgage deal and when it runs out they get another one so its ok’
Fook me, when I got my mortgage got the advisor to work out how much it would be at 17% when he laughed and said that would never happen i told him my parents were at that at one point in the 70s or 80s.
Anyway I could could afford it at that still so it was all good.
Which means a hike one rents because that’s just what we do, pass the cost on down.
I don’t know why people are saying buying is a mugs game.
I spent ten years renting paying someone else’s mortgage.
I’ve spent the last three chipping away at a loan on an asset that has gone up
A third in value.
Tell me where you can get an appreciation in an asset or investment like that other than property?
Why pay a mortgage when you can pay somebody else’s mortgage and more to live in the property they haven’t even paid off?
just about to get a mortgage just over 4%, fixed for 5 years, 40 years term. Time to tighten the belt.
You know what pisses me off?
People could have been sensible and fixed years back, but their fixes are expiring now or in the next year or so and suddenly they’re having to face the interest rate rises purely down to a timing issue.
Other people conveniently had their fix expire around 6-9 months ago and got much better rates when they refixed.
Even better: people could have been on a SVR for the last X years so weren’t locked into anything and were then able to fix just before the rate rises.
So many people are going to be thousands of pounds worse off than others through no fault of their own. So frustrating.
I know people who have mortgages that are well over £300,000 for small tiny “newly built” tin pot houses. Market is gonna crash and burn again.
With how the rich are buying up property, this seems like it’s engineered to do exactly what it will cause, mass sell off of houses/defaults. The rich cash buyers swoops in and buys them up, rents them out at extortionate rates, but since the alternative is a ridiculous mortgage, they have to pay or go homeless…
Once again, this benefits only the rich.
I don’t want a revolution, no one wants to live through those times. I just wish the rich felt the same.
A basic one bedroom should be free for everyone in this country, one of the richest in the world. Homelessness should not exist in society and there should always be a safety net for those priced out of the market.
The idea of a ‘fixed’ mortgage being only 2-10 years seems so crazy to me. I’m in the US (I’m British) and the standard mortgage here is 30 year fixed. I’m fixed at 2.6% for the next 30 years, which is insane. My mortgage payment will be the same in 2050 as it is today.
People don’t seem to understand that we’re at historic lows, and typically speaking, central banks don’t want ultra low rate environments as it lessens the ability to stimulate the economy when things go bad. Anyone who thinks that this might just be a blip and they’ll get back to a 1-2% ‘fixed’ rate any time soon are nuts.
If you can’t handle rates of under 2% you’re clearly overstretched, we’re going to see loads of people going bankrupt by being overburdened by credit cards, loans, their fancy new lease cars and unmanageable mortgage payments
It’s been a ticking time bomb for ages, and rates are extremely low, wait until they get to even 5% let alone 10% or higher.