Are we in a boom ?

ess0two

ad9898 wrote: »

Just got in and read this thread, quite a bit of anger/bitterness on both sides of the debate, why ?, there really is no point, no one is going to convince anyone on the other side to swap sides, if you know what I mean. Everyone knows where I stand in the debate, and I feel no anger or bitterness at all, if you want to buy now, your pretty much gauranteed to find a property that you can knock off 25% of the peak price, this has to be result for anyone who wishes to buy now, compared to 2 years ago.

Like anyone else I have no real idea of where things will go, going forward. 7 months ago we were only hours from complete economic meltdown that was never seen before, things have obviously improved since then, however the economic news in front of us is still dire, although probably not as bad as last autumn. One thing is for sure there is absolutely no evidence out there that prices are increasing, that alone should be enough for any HPC'r, keep saving, any appreciable HPI is dead, probably for about 8 years at least. Just step into the market when it suits, for me that will be 3 years, don't panic, don't get angry just keep saving (says me who has just spent 2.5k on a mountain bike....doh!:D)

Buy a good lock.

Dan:_4

mbga9pgf wrote: »

Dan, you are wrong. I have worked this out, I am not making it up; even if rates went up to 10%, I am still better off saving. I am working of a minimum 10 year fix, thus the current 5% rate I am planning on getting means I am still better off by saving. I have done all my sums, believe me!

But in order for your plan to work out you are anticipating on further house price falls. i.e. if rates went up to 10% tomorrow but house prices stayed the same, how would you be better off???

JayScottGreenspan

Dan: wrote: »

I suggested that getting a low rate mortgage product now will cost less in the long run then waiting for another (dunno maybe 5ish%) to fall from house prices. When interest rates rise, these products will become a lot less attractive, and the extra in monthly repayments will soon out way the savings made by getting the property 5% cheaper.

If he buys now and interest rates do go up as you predict he'll get a nasty shock when his mortgage rate resets to SVR. Especially if he's in negative equity.

Unless you're talking about long term fixes, of course. Principality are doing a 10 year fix at 4.99% with a £999 fee - not exactly competitive is it? Not exactly reflective of the base rate, either.

mbga9pgf

Dan: wrote: »

But in order for your plan to work out you are anticipating on further house price falls. i.e. if rates went up to 10% tomorrow but house prices stayed the same, how would you be better off???

IRs going up 10% and house prices staying the same :rotfl::rotfl::rotfl::rotfl:

I take it you heard why prices crashed in 1989-95?

I want it noted that this is NOT what I am wishing for. House prices are coming down fast enough and we dont need rates to go through the roof to acheive normal prices.

Dan, you didnt bother reading what I wrote : I have worked out that even with rates going up to 10%, if I save and buy a house of the same value in 2 years time, I will be making lower payments or will pay off the mortgage far earlier.

Calcs as follows:

250K mortgage. Go out buy today, 10 year fix at 4.99%

Monthly payments:£1284 per month.
Months to pay off mortgage: 216.
Principal remaining after 10 years payments: £101450.

Go out buy same 250K valued house, 2 years from now (saving 3K per month, currently easily achievable) fixed at 10%

Nonthly payments:£1292
Months to pay off mortgage:138
Principal remaining after 10 years payments: £45,600.
Simples!:beer:

So now go ahead and tell me that it makes sense to go out and buy. Because it doesnt!

Thrugelmir

JayScottGreenspan wrote: »

Unless you're talking about long term fixes, of course. Principality are doing a 10 year fix at 4.99% with a £999 fee - not exactly competitive is it? Not exactly reflective of the base rate, either.

Sounds a reasonable rate for a long term fix. Average SVR's across all lenders now sit at 4.14%.

Lenders such as Principality don't borrow at base rate.

Really2

mbga9pgf wrote: »

Calcs as follows:

250K mortgage. Go out buy today, 10 year fix at 4.99%

Monthly payments:£1284 per month.
Months to pay off mortgage: 216.
Principal remaining after 10 years payments: £101450.

Go out buy same 250K valued house, 2 years from now (saving 3K per month, currently easily achievable) fixed at 10%

Nonthly payments:£1292
Months to pay off mortgage:138
Principal remaining after 10 years payments: £45,600.
Simples!:beer:

So now go ahead and tell me that it makes sense to go out and buy. Because it doesnt!

You need to add £40,800 of over payments to the top calulation to take in to acount your extra two years of saving £3000PM.
Also Add to that your current rental costs.

mbga9pgf

Abbey are doing the same deal for 995 although you need to sort out your own survey and legal fees

mbga9pgf

Really2 wrote: »

You need to add £40,800 of over payments to the top calulation to take in to acount your extra two years of saving £3000PM.
Also Add to that your current rental costs.

rental currently is buttons. try 250 a month. Thats 250 a month with no maintainance bills.

I take your point about the extra 40K though. My point remains, I am stll saving cash, around 14K, remembering this assumes

Neutral Real house prices over the next 2 years (yeah right)
Interest Rates reaching 10% (prices will fall over 40% from peak if they ever get that high I reckon)

Really2

mbga9pgf wrote: »

rental currently is buttons. try 250 a month. Thats 250 a month with no maintainance bills.

I take your point about the extra 40K though. My point remains, I am stll saving cash, around 14K, remembering this assumes

Neutral Real house prices over the next 2 years (yeah right)
Interest Rates reaching 10% (prices will fall over 40% from peak if they ever get that high I reckon)

I would agree IR is not going up any time soon. so anyone wanting a mortgage at a low rate really have got up to a cuple of years to get a decent fixed rate.

Shame you could not of got a 0.19 lifetime traker and a massive discount last year (I think they did some 0.19 last year, I got a.49)
you could be nocking nearly the whole of that £3000 out of your mortgage for the next 1Y+;)

mbga9pgf

Really2 wrote: »

I would agree IR is not going up any time soon. so anyone wanting a mortgage at a low rate really have got up to a cuple of years to get a decent fixed rate.

Shame you could not of got a 0.19 lifetime traker and a massive discount last year (I think they did some 0.19 last year, I got a.49)
you could be nocking nearly the whole of that £3000 out of your mortgage for the next 1Y+;)

Another fair point, but prices were not as low last year. :cool: