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what percentage of interest rates have you factored in for affordability

geoffky
geoffky Posts: 6,835 Forumite
in Mortgages & endowments
i posted this question a while ago on the housing board but think it needs to be asked here...when factoring in affordability what rates are you using? . as i reckon interest rates will be so much higher in the next few years.. i would be working my payments out at 8 to 10 % to see whether i could afford them..or are people that stupid they have not given it any thought...(Christ i hope not).:o
It is nice to see the value of your house going up'' Why ?
Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
If you are planning to upsize the new house will cost more.
If you are planning to downsize your new house will cost more than it should
If you are trying to buy your first house its almost impossible.
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Comments

  • beecher
    beecher Posts: 2,497 Forumite
    My first mortgage was at over 8% so I've always used that as a base line. Could cope with a lot higher though - would never get a mortgage which I couldn't pay at 12% or so. I have a lot of concern about some of the posts on here from people who are banking on rates staying at the level they are now and 'hoping' things improve if they don't - terrifying.
  • ess0two
    ess0two Posts: 3,606 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    None of your business:D
    Official MR B fan club,dont go............................
  • geoffky
    geoffky Posts: 6,835 Forumite
    ess0two wrote: »
    None of your business:D


    it is when the taxpayer ends up picking up the bill for it all..ie council rehousing and.bankruptcy ect ect.:rolleyes:
    It is nice to see the value of your house going up'' Why ?
    Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
    If you are planning to upsize the new house will cost more.
    If you are planning to downsize your new house will cost more than it should
    If you are trying to buy your first house its almost impossible.
  • ess0two
    ess0two Posts: 3,606 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    geoffky wrote: »
    it is when the taxpayer ends up picking up the bill for it all..ie council rehousing and.bankruptcy ect ect.:rolleyes:

    Is'nt that what i pay my taxes for,a safety net should i fall on hard times.
    Official MR B fan club,dont go............................
  • beecher
    beecher Posts: 2,497 Forumite
    ess0two wrote: »
    Is'nt that what i pay my taxes for,a safety net should i fall on hard times.

    No-one should have a mortgage if they don't have their own safety net in terms of affordability. Falling on hard times means losing your job or facing illness, not having to pay an interest rate of 10%
  • iscrimger
    iscrimger Posts: 222 Forumite
    Part of the Furniture Combo Breaker
    I'm about to get a mortgage, hopefully. I've factored in an upper rate of 13% with room to cut some costs should it rise higher after a fixed rate period. Hopefully by that time I'll have built up some savings for some additional security which could be used to stem the extra cost until I can arrange something at a lower rate.

    I don't plan on sitting around letting my rates become that high as I'm sure nobody would.
  • Euphoria1z
    Euphoria1z Posts: 952 Forumite
    in my case i can afford my mortgage rate at 5%, struggle at 6%, really panic at 7% and loose it at 8%...this is not @ BOE but the rate thats applied to my mortgage, and this doesnt even take into account my other loans or out goings!!!
  • pickles110564
    pickles110564 Posts: 2,374 Forumite
    geoffky wrote: »
    i posted this question a while ago on the housing board but think it needs to be asked here...when factoring in affordability what rates are you using? . as i reckon interest rates will be so much higher in the next few years.. i would be working my payments out at 8 to 10 % to see whether i could afford them..or are people that stupid they have not given it any thought...(Christ i hope not).:o
    Dont feed the Troll.
  • Debbie1980
    Debbie1980 Posts: 69 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    We are househunting at the moment and I definitely factored in rate rises!
    I had worked out that we could still afford our anticipated mortgage amount at 9.6% (I wouldn't be happy but we could afford to pay it at the end of the day!) Any higher than that and we would have to dip in to the savings (that we would hopefully still have)
  • beecher
    beecher Posts: 2,497 Forumite
    pickles110564 wrote: »
    Dont feed the Troll.

    This thread raises a perfectly reasonable point for discussion and there's nothing trollish about it.
This discussion has been closed.
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