If you where buying today at what rate would you stress test?

Bluebirdnick

15%. It probably won't get there but it could, so if I can't afford my loan at 15%, I can't afford my loan.

Thrugelmir

geoffky wrote: »

If i was needing a mortgage and buying today i would be stress testing my affordability rates at 10%. what rates have you or will you plan for withing the first ten years of the mortgage?

Fixed rates will soon be hitting 6%. So a rate hitting at 10% may not be unrealistic for some borrowers.

The best advice must be the larger the deposit the better.

StevieJ

JayScottGreenspan wrote: »

Not only has a huge amount of wealth been transferred from the young to the old, but apparently they should be happy about it. :think:

You keep saying this, what do you mean by it :rolleyes: what do you mean by old, the FTBers who bought in the second half of the 90's at bargain prices?

chewmylegoff

depends what sort of mortgage you're on really. if you're buying with a lifetime tracker at say 4%, then stress testing at 10% might be a bit optimistic as that would be what you would be paying if base rate was 6.5%. (plus if you only have a small deposit, then in a couple of years' time you might be in negative equity and unable to remortgage on to a better deal).

Thrugelmir

chewmylegoff wrote: »

depends what sort of mortgage you're on really. if you're buying with a lifetime tracker at say 4%, then stress testing at 10% might be a bit optimistic as that would be what you would be paying if base rate was 6.5%. (plus you might be unable to remortgage at a better rate if you were in negative equity)

A lifetime tracker at base plus 4% :eek:


Are you a mortgage broker?;)

jamtart6

we made sure we could afford the payments at 15%. Many tradespeople come into our home and say it is small (just a 3 bed semi new build type) but I'd rather have a small affordable home than a massive one that'd I always be stressing about paying the mortgage on if rates increased.

I reckon 12%

chewmylegoff

Thrugelmir wrote: »

A lifetime tracker at base plus 4% :eek:


Are you a mortgage broker?;)

there are deals like that on the market at the moment (and worse) one presumes that people are taking them up (e.g. hsbc 10% deposit 4.7% term tracker, or 6% fixed for 2 years). tracker is linked to "HSBC bank rate", not base rate, but one presumes that bank rate will track base rate.

even with LTV 75% they're offering bank of england base rate +3.09%.

presume people are buying at those rates.

JayScottGreenspan

StevieJ wrote: »

You keep saying this, what do you mean by it :rolleyes: what do you mean by old, the FTBers who bought in the second half of the 90's at bargain prices?

You get a cash benefit from high house prices when you sell or downsize.

If you don't own a home, or want to trade up in the future, rising house prices will mean more of your £s spent on housing, and less on living.

Know many 20/30-somethings ready to downsize?

Thrugelmir

chewmylegoff wrote: »

even with LTV 75% they're offering bank of england base rate +3.09%.

presume people are buying at those rates.

short term attraction and benefit but longer term..............

Conrad

Geoffky

If it had been down to those as cautious as you, Man would never have got to the Moon, Australia or anywhere else with a risk attatched.

It's 1973, a geek in a bar tells you of his plan to get a computer into every home....... how would you have stress tested that one? The equivolent to a geek tonight telling you he has a plan to get a USB port inserted into everyones heads so they can do direct brain downloads.