Is it Time to buy and secure a long-term fixed rate mortgage?

SingleSue

Excellent thread DD, although I may not agree with all your points they are very good thinking and talking ones.

For me, if I was in a position to buy (which quite clearly I am not), I think my over cautious nature and memory of what happened in the last recession, would temper my decisions...in other words, I would probably run a mile no matter how many sensible arguments were put forward!

Your points though are certainly food for thought.

Oh, and what happened to my mention? Pah, going to stomp off in a huff now

TDS_2

Interesting idea by the OP.

Unfortunately, I fear that many people will be buying now on shorter term (2yr?) fixes or variable rates failing to consider that (as the OP states) interest rates can only really go one way. Buying a house because it is affordable now, could well be storing up problems as soon as the teaser rate evapourates.

I don't intend to buy quite as soon as the OP suggests, but will certainly be taking a long term fix.

Pobby

Yes, totally agree. It`s bang out of order that poor spellers/dyslexics/ and others with literacy problems should feel excluded. By the way one of my relatives has dyslexia yet he runs his own company and employs others.

I have a little theory of my own why this board, in the last few months has become something of a battle ground. It`s based on fear! I don`t care what situation you are in, the present economy is affecting everyone. My fears, OK I will be honest.

My retirement funds, will they recover when I need them. Will my now, shrinking, one man contract based business survive? Just had the worse month for years. Will I even be allowed to keep it on as it is performing about 70% less turn over from peak?

Others have other fears I am sure depending on what circumstances they are in. Do we buy now? Is my job safe? What if, what if?

It certainly is getting me very down and making me very frustrated.

There is a lot of indecision around, and understandably so. Looking back on the last 10 years, it alls seems like some illusion based on debt. If someone said that we would have IRs this low I would have laughed at them. Suddenly things are starting to seem very unreal.

sabretoothtigger

4.75% on 10 year fix

Isnt interest the largest cost of a mortgage.
I guess its an interest vs capital sum loss risk, the longer you wait the less likely the low interest rate will be there but you also reduce the risk of paying too much if you wait so which costs more

Also depends how much you are paying in rent right now and how long you expect to pay off the mortgage.

If you knew that you would take 25 years from now to pay it off then interest has to be the largest cost to you so going for a low fixed rate is the priority over perfect market timing on the price imo

Heyman_2

DD - I think you perhaps have a reputation as in the past you haven't been afraid of getting embroiled in some of the silliness that goes on here and you aren't afraid to...how can I put it....go the extra mile when you're bantering with someone.

Unfortunately being a public forum, it's all airing of dirty laundry so everybody sees it and forms an opinion - be they a lurker or a regular poster. Some will be neutral, some will take 'sides' hence why you probably see first-time posters instantly taking a certain tone.

Ah the joys of internet forums

Dithering_Dad

Heyman wrote: »

DD - I think you perhaps have a reputation as in the past you haven't been afraid of getting embroiled in some of the silliness that goes on here and you aren't afraid to...how can I put it....go the extra mile when you're bantering with someone.

Unfortunately being a public forum, it's all airing of dirty laundry so everybody sees it and forms an opinion - be they a lurker or a regular poster. Some will be neutral, some will take 'sides' hence why you probably see first-time posters instantly taking a certain tone.

Ah the joys of internet forums

You're totally right Heyman, and I said as much in an earlier post on this thread - once you start arguing back you end up as bad (if not worse) as the trolls. I have given as good as I got (and usually better), but I hope that people look past that and can see that generally my posts are mean't to be helpful, I believe and act on the advice I give, I never make comments on race, never comment on poor spelling/grammar (except to ask for further info if I really don't understand the taxt) and I never start an argument. I guess people do see this or I wouldn't have so many people who are happy to PM me.

I think the turning point was when i realised that most of the attacks against me were routed in jealousy (if you're open about your financial strategies, you have to be open about your finances - some people turn nasty if they feel you're doing better than them) and they were carried out by a very small minority - though with the use of sock puppets it can seem like you have hundreds of 'enemies' I know of one person on here (ad44downey) who has at least two other logons and uses them soley for childish attacks. The annoying thing with downey is that he posts some good stuff and I just wish he'd stick to that and stop the other crap.

Hey ho, it's only an internet forum, dear. As Michael Winner would say.

wolvoman

RPI has never included house prices and it doesn't now.

It does include mortgage costs (but not a product of house prices though).


Example 1:
Over the course of a year, mortgage rate falls from 5% to 4% and house prices double - RPI will show a negative figure.

Example 2:
Over the course of a year, house prices fall but mortgage rates go up from 4 to 5% - RPI will show a positive figure.

Dithering_Dad

wolvoman wrote: »

RPI has never included house prices and it doesn't now.

It does include mortgage costs (but not a product of house prices though).


Example 1:
Over the course of a year, mortgage rate falls from 5% to 4% and house prices double - RPI will show a negative figure.

Example 2:
Over the course of a year, house prices fall but mortgage rates go up from 4 to 5% - RPI will show a positive figure.

True in principle, but in reality if we have a housing boom then mortgage values (and in turn montly repayments) inevitably increase, which impacts RPI.

My first home was a 2 bed bungalow in Cheshire that were selling for £40k back in 1995, by the peak of the market they had hit £200k. Clearly people buying with 5% deposits in 1995 were paying a much lower mortgage than those buying with 5% deposits in 2006.

Its a shame the government didn't use RPI as the benchmark inflation figure for the BoE instead of CPI because then they would have had to do something about house price inflation.

scousethife

Dithering_Dad wrote: »

blah

Didnt read any of your post.

Just wanted to say as I have said all along you are a liar!

You said I was on your ignore list!

Right to give you a chance, you are claiming to know that interest rates will rise. I will take back all I have said if you can produce a post from 18 months ago that you predicted rates would be at or around .5%

If you can I will quite happily say you are the god of predictions and everyone should follow your advice

the_ash_and_the_oak

Dithering_Dad wrote: »

A lot of people on this particular board find it very difficult to see the world from other people's perspective. Not everyone is happy renting, not everyone is single, not everyone want to wait years to buy (some have already been waiting years already), not everyone has a 60% or 70% or 100% deposit. You might feel that there is 'not an urgency to enter this particular market', but other people aren't interested in property speculation and don't see it as a 'market' or a commodity or an investment - they see it as their home. Sure, they want to get it at a decent price, but not if that means they're paying hundreds of £'s more for their mortgages each month.

It would be cold comfort indeed to know that you bought your house for £10k less than someone buying now, if you get it reposessed because you couldn't meet mortgage payments that have increased by over £1k per month.

I should state here that I am not interested in property speculation either. I am far too cautious to be any kind of speculator. Unfortunately - as it is the largest purchase most people will make - and requires external funding to make it happen - it makes speculators of us all. To buy is to speculate, to rent or wait is also to speculate. We all already have a home that we live in, regardless of whether we own it or not. The speculation is in the question of ownership of a house. The utility or use-value of a house is enjoyed regardless imo