OMG - the stress

ukcarper

Don't worry about all the doom and gloom on here look on the bright side in 30 years time you'll be living rent free no matter what happens to house prices

JayZed

You're buying now? For £115,000? Are you crazy?! It'll only be worth two shillings and sixpence this time next year. Wait a few months and you'll be able to buy a seventeen-bedroom mansion for less.

Just kidding Congrats on agreeing a price, hope it all goes well.

dopester

Conrad wrote: »

When we found our home a few years back, £10k was neither here nor there in the great scheme. It's £1.09 per day over 25 years.

I'm not saying this to be provocative, I've always been bemused by people that will walk away from an ideal home purchase when it boils down to £1.00 per day - you could save that back by installing energy efficient measures or seek a £1 per day pay rise at some point.

How do you work that out then?

£1.09 x 365 days = £397.85 x 25 years = £9946.25

And if you have to borrow that £10K, then I like to use !!!!!!'s old signature as a general formula, although I'm not sure how accurate it is. For every £1 borrowed, prepare yourself for paying back an average of £3 over an average 25 year mortgage.

Tell you what... you keep the heating off in Winter so you can meet the sellers asking price. I'd rather be warm and cosy with the £30,000 I'll save over 25 years by not overpaying by £10K.

JayZed

dopester wrote: »

For every £1 borrowed, prepare yourself for paying back an average of £3 over an average 25 year mortgage.

I think you misremember !!!!!!'s old signature! Your calculation would imply that you pay back three times the borrowed amount on the average mortgage, which would be extortionate - that would imply an average interest rate of over 11%.

Assuming an average interest rate of 5%, a 25-year mortgage will cost you 1.77 times the amount borrowed if you don't make any overpayments. So borrowing an extra £10K will cost you £17.7K or about £1.94/day by my calculations.

dopester

JayZed wrote: »

Assuming an average interest rate of 5%, a 25-year mortgage will cost you 1.77 times the amount borrowed if you don't make any overpayments. So borrowing an extra £10K will cost you £17.7K or about £1.94/day by my calculations.

kk JZ. I did admit to not being sure of how accurate the formula was. My simpler form of maths relies more on common-sense.

I've just googled "for every pound borrowed mortgage"

And near top links have summary info in your ballpark.

• Borrowers repay £2.18 for every pound borrowed
• In other words you will have paid back £1.93 for every pound borrowed.

Oh and !!!!!! is linked from that page too, with that search. :rotfl:

!!!!!!? wrote: »

Do you want the house enough to pay 15000 quid more for it than a professional valuer says it is worth? Only you can answer that question.

(bear in mind you end up paying 2-3 quid back for every pound borrowed on a typical mortgage)

Assuming an average of... x% for savings over the last 25 years.. I'd guess if you had the money set-aside to save each pound, instead of over-borrow, that adds up too.

dopester

And checking !!!!!!'s MSE profile page, this was his signature.

Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.

ukcarper

I know this is MSE but money isnt everything

If house prices are falling at 2% a month I’m losing a lot of money on paper but as I'm very happy where I am do I care no. My children might or the council if they have to pay my nursing home fees instead of my equity paying them. Don’t give me claptrap about selling renting and buying back when house prices have bottomed out much to much agro especially when my mortgage is almost zero.

dopester

Don't know where that came from.

Touchy today ukcarper?

Fine for you having a near zero mortgage. Perhaps you should take a moment considering what younger people are up against with house prices at these levels.

ukcarper wrote: »

I know this is MSE but money isnt everything

I agree with you, but at this stage in our civilisation, the mechanisms or money is how the world is organised, and hopefully in time to come we can get out of this barbaric stage to something better.

Money is a sign of poverty, meaning that money only has a function in a scarcity economy, and therefore its existence betrays a pre-abundant (poor) society.

- Iain M.Banks (State of The Art)

ukcarper

I am happy for house prices to fall to a reasonable level and can see why people are putting off buying for now. But some people are calling the OP crazy for buying a house they obviously like.

Also you could give a thought to people who did not take advantage of high multiply mortgages and save hard for a large deposit and now find them self approaching negative equity.