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MrPin

Interest Rate Rises

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2 hours ago, MrPin said:

Just a gentle hint of that on the So-Called BBC, courtesy of BoE.

For any one with a big recent mortgage, this will hit a bit.

Yet more lies to keep the people borrowing. I notice you can get a 5 year mortgage fix for 1.8% at the moment.(big shock at the end of that).

Although i will say the BOE seem to be doing whats being discussed on DBs thread.

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2 minutes ago, Bobthebuilder said:

Yet more lies to keep the people borrowing. I notice you can get a 5 year mortgage fix for 1.8% at the moment.(big shock at the end of that).

Although i will say the BOE seem to be doing whats being discussed on DBs thread.

Any chance of a summary for the intellectually challenged?  I can’t keep up with the debates on that thread. o.O  

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3 minutes ago, One percent said:

Any chance of a summary for the intellectually challenged?  I can’t keep up with the debates on that thread. o.O  

I can try.

Central banks raising rates as we going into a reduction in credit availability. Well that's the beginning of it and that has probably already started.

 

I think.

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9 minutes ago, Bobthebuilder said:

I can try.

Central banks raising rates as we going into a reduction in credit availability. Well that's the beginning of it and that has probably already started.

 

I think.

Ta. See, it’s not easy. xD

im guessing that raising rates at this point is a bad thing?  

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44 minutes ago, One percent said:

Ta. See, it’s not easy. xD

im guessing that raising rates at this point is a bad thing?  

Example: Tom & Lucy

FTB both employed, purchase house £279,000 with 10% down

Mortgage 2 year fix over 35 years at 2.9% repayment £950 per month split between them.

Interest rates rise a wee bit to 4% so repayment is £1111 per month

Shortly after they rise to 5% so repayment is now £1268 per month

There is a run on the currency markets so rates hit 6%, repayment now £1432

Lucy is made redundant, the house is now worth £175,000 (i.e. £160K mortgage at 6.5%)

Everyone is fucked.

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1 hour ago, One percent said:

Any chance of a summary for the intellectually challenged?  I can’t keep up with the debates on that thread. o.O  

It's worth asking in thread as it's a very friendly discussion, and newcomers who've missed the bulk are treated kindly. All are welcome of any knowledge level. No presumptions are made.

I did type out a summary but it was a bit garbled, so deleted it. You're better off joining in!

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4 minutes ago, Chewing Grass said:

Example: Tom & Lucy

FTB both employed, purchase house £279,000 with 10% down

Mortgage 2 year fix over 35 years at 2.9% repayment £950 per month split between them.

Interest rates rise a wee bit to 4% so repayment is £1111 per month

Shortly after they rise to 5% so repayment is now £1268 per month

There is a run on the currency markets so rates hit 6%, repayment now £1432

Lucy is made redundant, the house is now worth £175,000 (i.e. £160K mortgage at 6.5%)

Everyone is fucked.

Welcome to the events post black Wednesday.  I remember interest rates hitting something like 17 percent. Squeaky bum time. 

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11 minutes ago, One percent said:

Welcome to the events post black Wednesday.  I remember interest rates hitting something like 17 percent. Squeaky bum time. 

I remember paying 14.5% on a Halifax Mtg IIRC.

At the time about 20% of cars in autotrader (pre-internet) were redundancy forces sale etc.

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2 minutes ago, Chewing Grass said:

I remember paying 14.5% on a Halifax Mtg IIRC.

At the time about 20% of cars in autotrader (pre-internet) were redundancy forces sale etc.

Can’t remember what I was charged but I do remember walking in from work to see the news where it had hit 17 percent. Fuck. o.O

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2 hours ago, Chewing Grass said:

I remember paying 14.5% on a Halifax Mtg IIRC.

At the time about 20% of cars in autotrader (pre-internet) were redundancy forces sale etc.

I had a mortgage @ 9% around 1998. Some nice good cars to be found in Autotrader back then.

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8 hours ago, Chewing Grass said:

Example: Tom & Lucy

FTB both employed, purchase house £279,000 with 10% down

Mortgage 2 year fix over 35 years at 2.9% repayment £950 per month split between them.

Interest rates rise a wee bit to 4% so repayment is £1111 per month

Shortly after they rise to 5% so repayment is now £1268 per month

There is a run on the currency markets so rates hit 6%, repayment now £1432

Lucy is made redundant, the house is now worth £175,000 (i.e. £160K mortgage at 6.5%)

Everyone is fucked.

Based on this quick calc that the average punter pays 1000 per month on a mortgage, houses are at least 43.2% overvalued but low rates bubble zirp from the BOE. If rates were a not at all high 6% the available pot to purchase would be 43% less. Of course the governbankments take on stamp duty (extortion money) would also be 43% down. Which is why zirp is here to stay, follow the money, its always about the money. 

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9 hours ago, Chewing Grass said:

There is a run on the currency markets so rates hit 6%

How does that bit work?

Given that in 2011 with Sterling still ahead in the race to the bottom and RPI hitting 5.6%, the BoE sat on their hands at 0.5% and "looked through" the "temporary" inflation? Since then they have stoked even more household debt.

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12 hours ago, Chewing Grass said:

Example: Tom & Lucy

FTB both employed, purchase house £279,000 with 10% down

Mortgage 2 year fix over 35 years at 2.9% repayment £950 per month split between them.

Interest rates rise a wee bit to 4% so repayment is £1111 per month

Shortly after they rise to 5% so repayment is now £1268 per month

There is a run on the currency markets so rates hit 6%, repayment now £1432

Lucy is made redundant, the house is now worth £175,000 (i.e. £160K mortgage at 6.5%)

Everyone is fucked.

I think there’s a few people like me, a FTBer millennial in their 30s with a reasonable income and a 50% deposit due to saving a fair chunk, sat waiting for the time to buy.

My dilemma is do I buy sooner and have a place to live and hopefully not be as fucked as the example of Tom and Lucy due to having a smaller mortgage thanks to the deposit OR stick it out a bit longer wait for the drop that might not happen and my 50% deposit then becomes a 75% deposit on the now reduced house??

Not wanting to profit from the misery of others but if I wait I’m sure there would be some scenario like the above where a good deal could be had...

 

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2 hours ago, mh9000 said:

I think there’s a few people like me, a FTBer millennial in their 30s with a reasonable income and a 50% deposit due to saving a fair chunk, sat waiting for the time to buy.

My dilemma is do I buy sooner and have a place to live and hopefully not be as fucked as the example of Tom and Lucy due to having a smaller mortgage thanks to the deposit OR stick it out a bit longer wait for the drop that might not happen and my 50% deposit then becomes a 75% deposit on the now reduced house??

Not wanting to profit from the misery of others but if I wait I’m sure there would be some scenario like the above where a good deal could be had...

 

Just go fr a 10 year fix.

5 years if you are not so brave.

I shifted our mortgage to a 10year mortgage, 5 year fix @ 1.5ish (not sure of exact APR, its way under 2 and more than 1).

LTE of under 1.

Overpaid for ~2 years, so amount halved.

There'll be fuckall left when the fix ends - way under 10k. Even if APR is ~7% the cash cost will be fuckall.

 

 

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2 hours ago, mh9000 said:

I think there’s a few people like me, a FTBer millennial in their 30s with a reasonable income and a 50% deposit due to saving a fair chunk, sat waiting for the time to buy.

My dilemma is do I buy sooner and have a place to live and hopefully not be as fucked as the example of Tom and Lucy due to having a smaller mortgage thanks to the deposit OR stick it out a bit longer wait for the drop that might not happen and my 50% deposit then becomes a 75% deposit on the now reduced house??

Not wanting to profit from the misery of others but if I wait I’m sure there would be some scenario like the above where a good deal could be had...

 

It all depends where you are.  The SE and London are still falling so I'd wait a while yet whereas some other areas are flatish and some rising by all accounts.  Look at sold prices rather than asking to get some idea of what's happening in your area.  I don't think interest rates are going up any time soon.  (Carnage has given this hint before and then cut them!).  However in DBs deflation thread he thinks interest rates will rise at the end of the next cycle and could rise quite quickly so approx 10% by 2025 I think he said based on his and his "friend's" work.  Obviously this is not gospel so I'd aim to overpay as much as possible on any mortgage and also get a good few years at a fixed rate.

 

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On 03/05/2019 at 08:29, Democorruptcy said:

How does that bit work?

Given that in 2011 with Sterling still ahead in the race to the bottom and RPI hitting 5.6%, the BoE sat on their hands at 0.5% and "looked through" the "temporary" inflation? Since then they have stoked even more household debt.

Yeah but that inflation was only due to the price of stuff going up and shit.

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On 02/05/2019 at 20:58, Bobthebuilder said:

Yet more lies to keep the people borrowing. I notice you can get a 5 year mortgage fix for 1.8% at the moment.(big shock at the end of that).

Although i will say the BOE seem to be doing whats being discussed on DBs thread.

I just got 2.7% for 10 year fixed.. its higher than I could have got on a 5 year, but I will overpay.. 

take no chances.. 

 

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Posted (edited)
5 minutes ago, macca said:

I just got 2.7% for 10 year fixed.. its higher than I could have got on a 5 year, but I will overpay.. 

take no chances.. 

 

Sterling decision, lock-in low and long, the only way you will lose is if rates go negative and that ain't going to happen on mortgages...

Edited by Chewing Grass

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8 hours ago, mh9000 said:

@spygirl@janch

Thanks for the replies,  I'm looking at up north or possibly west midlands depending on job.

I use Scaby as a good example of a place to buy.It way away from beign a seaside shit hole like b;ackpool, Yarmouth bmouth etc etc.

There are some nice areas - atheres also some bad areas but are easily avoided.

Its a train link to York (and London)

The nice areas are really nice. By the sea and the moors - Dalby.

There's so littlesellign and so many probates that I reckon if you pick your house - one thats been for sale for 2+ years - that a 20-30% off offer is likely to be accepted - if they dont they are smoking crack.

Theres a couple of pretty good state schools -scalby n St Augustine (for papists...) and an excellent 6th form. Even a good private school.

Of course, unl;ess you work in publci secto youll hve to brign your own job.

 

 

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On 03/05/2019 at 10:43, mh9000 said:

I think there’s a few people like me, a FTBer millennial in their 30s with a reasonable income and a 50% deposit due to saving a fair chunk, sat waiting for the time to buy.

My dilemma is do I buy sooner and have a place to live and hopefully not be as fucked as the example of Tom and Lucy due to having a smaller mortgage thanks to the deposit OR stick it out a bit longer wait for the drop that might not happen and my 50% deposit then becomes a 75% deposit on the now reduced house??

Not wanting to profit from the misery of others but if I wait I’m sure there would be some scenario like the above where a good deal could be had...

 

You need to excel the numbers, comparing mortgage cost at low IRs against renting.

You can leverage renting by usign the 1month period to put low ball offers in on houses.

Communicate that you have a mortgage and can proceed.

Seriously.

Last 10 years, in the North barely anything shifts - if the seller is over 65 they are more likely to leave in a coffin than a removal lorry.

This situation is now the same in the South - large structural changes due to finsec blowing up - few jobs, much lower paid, current home owners aging.

 

 

 

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On 03/05/2019 at 01:04, Bobthebuilder said:

I had a mortgage @ 9% around 1998. Some nice good cars to be found in Autotrader back then.

Except this time you won't be able to flog the BMW, as it's tied into a four-year PCP deal!

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2 minutes ago, Craig said:

Except this time you won't be able to flog the BMW, as it's tied into a four-year PCP deal!

Can you hand a PCP car back at any time? I know a PCH deal can be once a certain threshold of capital has been paid back. From what I understand the finance company won't like it though and would probably never lease to you again.

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