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  • FIRST POST
    • vmp
    • By vmp 9th Jan 18, 6:20 PM
    • 37Posts
    • 6Thanks
    vmp
    Could you afford your mortgage under a Corbyn government?
    • #1
    • 9th Jan 18, 6:20 PM
    Could you afford your mortgage under a Corbyn government? 9th Jan 18 at 6:20 PM
    I'm currently midway through a 5 year fixed rate mortgage and with the possibility of Corbyn rising to power I'm thinking about what could happen.


    If we disregard Blair and Brown (generally regarded as centrist, with Thatcher describing Blair as her "greatest achievement"), the most recent Labour government was James Callaghan between 1976-1979.


    During this time, the Bank of England base rate peaked at 15%.


    My mortgage payments are currently about £1,400 a month.


    If interest rates were at 15%, they would increase to about £3,900 a month according to the MSE mortgage rate calculator: https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#results


    Frankly, I can see no other outcome to this than my house being repossessed.


    How would everyone else get along?
Page 1
    • Thrugelmir
    • By Thrugelmir 9th Jan 18, 6:28 PM
    • 56,675 Posts
    • 50,047 Thanks
    Thrugelmir
    • #2
    • 9th Jan 18, 6:28 PM
    • #2
    • 9th Jan 18, 6:28 PM
    I'm currently midway through a 5 year fixed rate mortgage and with the possibility of Corbyn rising to power I'm thinking about what could happen.

    Originally posted by vmp
    Is there going to be a General Election soon? Must have missed the news.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • E&G
    • By E&G 9th Jan 18, 9:08 PM
    • 29 Posts
    • 11 Thanks
    E&G
    • #3
    • 9th Jan 18, 9:08 PM
    • #3
    • 9th Jan 18, 9:08 PM
    As a newcomer here I hadn't realised this board doubled up as the comments section on the Daily Mail.

    If you foresee rates rising rapidly then save as much as you can to pay in at the end of your fix.

    For what it's worth interest rates peaked under Thatcher and but for a short period in 87-88 didn't go below 10% until Black Wednesday in late '92. So probably a bit silly taking out a mortgage under a Tory-led government...
    • newatc
    • By newatc 9th Jan 18, 9:46 PM
    • 145 Posts
    • 159 Thanks
    newatc
    • #4
    • 9th Jan 18, 9:46 PM
    • #4
    • 9th Jan 18, 9:46 PM
    I think Corbyn is going to write off all mortgages as soon as he written off the tuition fees,
    • sandsy
    • By sandsy 9th Jan 18, 10:48 PM
    • 1,251 Posts
    • 735 Thanks
    sandsy
    • #5
    • 9th Jan 18, 10:48 PM
    • #5
    • 9th Jan 18, 10:48 PM
    Base rates tend go up when inflation is high. And when inflation is high, people demand higher pay rises. So you would generally have a higher salary to cover your increased costs.

    And apart from that, the amount owing on your mortgage will reduce in real terms and your property may well increase in value.
    • bigstevex
    • By bigstevex 9th Jan 18, 11:50 PM
    • 691 Posts
    • 340 Thanks
    bigstevex
    • #6
    • 9th Jan 18, 11:50 PM
    • #6
    • 9th Jan 18, 11:50 PM
    No general election due

    It's all relative as mentioned

    Corbyn won't win he's to far left

    Close thread
    • Crashy Time
    • By Crashy Time 10th Jan 18, 12:24 AM
    • 5,360 Posts
    • 2,235 Thanks
    Crashy Time
    • #7
    • 10th Jan 18, 12:24 AM
    • #7
    • 10th Jan 18, 12:24 AM
    Trump won`t win, he`s a nutter!


    Brexit won`t happen, some people in the know in Islington say it won`t!


    Don`t close mind
    • gardner1
    • By gardner1 10th Jan 18, 12:30 AM
    • 2,283 Posts
    • 3,379 Thanks
    gardner1
    • #8
    • 10th Jan 18, 12:30 AM
    • #8
    • 10th Jan 18, 12:30 AM
    Comrade Corbyn.........tried and failed,yes he'll try and gloss it up that he nearly toppled TM but he still lost.Next time he will lose by a much bigger gap.....to many Tories didn't bother voting and a few voted Labour because of Brexit.
    Corbyn had his chance and still blew it......he won't get a 2nd,mind you I won a fair bit on the outcome from a deluded Jezza supporter
    • csgohan4
    • By csgohan4 10th Jan 18, 8:00 AM
    • 4,093 Posts
    • 2,565 Thanks
    csgohan4
    • #9
    • 10th Jan 18, 8:00 AM
    • #9
    • 10th Jan 18, 8:00 AM
    if he gets rid of RTB maybe I might vote for him
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • bigstevex
    • By bigstevex 10th Jan 18, 8:04 AM
    • 691 Posts
    • 340 Thanks
    bigstevex
    Comrade Corbyn.........tried and failed,yes he'll try and gloss it up that he nearly toppled TM but he still lost.Next time he will lose by a much bigger gap.....to many Tories didn't bother voting and a few voted Labour because of Brexit.
    Corbyn had his chance and still blew it......he won't get a 2nd,mind you I won a fair bit on the outcome from a deluded Jezza supporter
    Originally posted by gardner1
    Comrade Corbyn
    • bertiewhite
    • By bertiewhite 10th Jan 18, 8:12 AM
    • 753 Posts
    • 796 Thanks
    bertiewhite
    If Steptoe gets into government, your home will be repossessed and re-let to a collective under his 1st 5 year plan
    • kingstreet
    • By kingstreet 10th Jan 18, 8:14 AM
    • 32,590 Posts
    • 17,541 Thanks
    kingstreet
    The 'Debate' board is the right place for this.

    Can one of the board guides move it over there...?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Eric_the_half_a_bee
    • By Eric_the_half_a_bee 10th Jan 18, 8:20 AM
    • 853 Posts
    • 2,916 Thanks
    Eric_the_half_a_bee
    As a newcomer here I hadn't realised this board doubled up as the comments section on the Daily Mail.
    Originally posted by E&G
    The Shadow Chancellor has announced that he is making contingency plans for a run on the pound should Labour get into power.

    What is unreasonable about mortgage payers making similar plans?
    • Brock_and_Roll
    • By Brock_and_Roll 10th Jan 18, 9:34 AM
    • 778 Posts
    • 749 Thanks
    Brock_and_Roll
    To be honest, a more appropriate question would be "Will my job be at risk under a Corbyn government?" as from my experience it is lack of income that is the issue not the mortgage cost!


    If Corbyn were to introduce radical socialist policies, and borrow the money to do so (this is not certain as McDonald in currently on a charm offensive in the City try to explain why everything will be ok..........) then interest rates would of course rise pushing up mortgage rates in due course.


    However, house (and other asset) prices are of function of the cost of money. So if rates rise significantly, asset prices will fall accordingly. For a new mortgage borrower the impact may not be that great - the mortgage will still account for a similar percentage of their monthly income.


    I am old enough to remember the pain of the last time mortgage rates were 10%+. Basically we lived on bread & water for a year or so to ensure we kept up with the mortgage - EVERYTHING else had to go, which today would mean smart phones, meals out etc. Certainly not looking forward to this happening again, but we would do it again and survive.


    ....but if I lost my job in a post-Corbyn recession I would be ****ed !!
    • NineDeuce
    • By NineDeuce 10th Jan 18, 11:02 AM
    • 672 Posts
    • 581 Thanks
    NineDeuce
    They will never go up to 15% though. Why would the BoE intentionally put millions of people with unaffordable debt?

    Back in the 80s and 90s, houses were much more affordable than they are now, so the comparison is fairly irrelevant.
    • davidmcn
    • By davidmcn 10th Jan 18, 12:10 PM
    • 6,502 Posts
    • 6,396 Thanks
    davidmcn
    I'm currently midway through a 5 year fixed rate mortgage and with the possibility of Corbyn rising to power I'm thinking about what could happen.


    If we disregard Blair and Brown (generally regarded as centrist, with Thatcher describing Blair as her "greatest achievement"), the most recent Labour government was James Callaghan between 1976-1979.


    During this time, the Bank of England base rate peaked at 15%.


    My mortgage payments are currently about £1,400 a month.


    If interest rates were at 15%, they would increase to about £3,900 a month according to the MSE mortgage rate calculator: https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#results
    Originally posted by vmp
    So sell your house, put your cash into the bank, and live off the massive interest returns (in your controlled-rent abode).
    • ValiantSon
    • By ValiantSon 10th Jan 18, 7:01 PM
    • 165 Posts
    • 163 Thanks
    ValiantSon
    I'm currently midway through a 5 year fixed rate mortgage and with the possibility of Corbyn rising to power I'm thinking about what could happen.


    If we disregard Blair and Brown (generally regarded as centrist, with Thatcher describing Blair as her "greatest achievement"), the most recent Labour government was James Callaghan between 1976-1979.


    During this time, the Bank of England base rate peaked at 15%.


    My mortgage payments are currently about £1,400 a month.


    If interest rates were at 15%, they would increase to about £3,900 a month according to the MSE mortgage rate calculator: https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#results


    Frankly, I can see no other outcome to this than my house being repossessed.


    How would everyone else get along?
    Originally posted by vmp
    I'm sorry, but this shows a remarkable lack of both political and historical understanding. It does suggest, however, that the right wing press are being quite successful with their propaganda.
    • Thrugelmir
    • By Thrugelmir 10th Jan 18, 7:25 PM
    • 56,675 Posts
    • 50,047 Thanks
    Thrugelmir
    however, that the right wing press are being quite successful with their propaganda.
    Originally posted by ValiantSon
    There's none required for Corbyn.

    Focus is currently on Brexit and the next move by the BOE (and the Fed, BOJ and the ECB). Central bankers are the ones steering the course not inept polticians.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • vmp
    • By vmp 10th Jan 18, 8:31 PM
    • 37 Posts
    • 6 Thanks
    vmp
    I'm sorry, but this shows a remarkable lack of both political and historical understanding. .
    Originally posted by ValiantSon
    Interesting. Care to elaborate?

    Actually, I know. Corbyn is often praising Venezuela; it's a "socialist paradise", an "inspiration".

    Perhaps we should look towards Venezuela for guidance?

    Interest rates there are currently around 21%.

    How would you fare with your mortgage repayments with interest rates at 21%. Better?

    Or are they not around 21% in Venezuela, and that's another conspiracy of the "right wing press"?
    • daveyjp
    • By daveyjp 10th Jan 18, 9:36 PM
    • 7,265 Posts
    • 5,667 Thanks
    daveyjp
    I'm currently midway through a 5 year fixed rate mortgage and with the possibility of Corbyn rising to power I'm thinking about what could happen.


    If we disregard Blair and Brown (generally regarded as centrist, with Thatcher describing Blair as her "greatest achievement"), the most recent Labour government was James Callaghan between 1976-1979.


    During this time, the Bank of England base rate peaked at 15%.


    My mortgage payments are currently about £1,400 a month.


    If interest rates were at 15%, they would increase to about £3,900 a month according to the MSE mortgage rate calculator: https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#results


    Frankly, I can see no other outcome to this than my house being repossessed.


    How would everyone else get along?
    Originally posted by vmp
    I can only assume you haven’t looked at historic interest rates and compared it with the party in power. In 1989 rates were 14.875% and I was buying a house in 1992 when the rates increased 3 times in a day to 15%.

    The current situation is a complete abberation, but that’s no reason to get used to it. Pay down the mortgage while rates are low.
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