House price rises "not sustainable"

Dan:_4

Graham_Devon wrote: »

LOL, at an interest rate of 6.34%.

An arrangement fee of 2.5% of the total loaned.

On the house I'm looking at, that would mean basically the arrangement fee it's self would be £4225

Or you could pay 7.14% with a £495 product fee?

Weather you would buy this deal is irrelevant, my point is 10% deposit mortgages are available, something you said was not the case.

StevieJ

Dan: wrote: »

The smaller the deposit, the more expensive rates you pay. This is not something new.

Over the years, as house prices rise and you pay the mortgage, your LTV will reduce and so will the rates.

Its hard at first but gets easier over the years. Ask anyone who has had a mortgage over 10, 15, 20 years.

I agree, mine was punishing at first :eek:

sjaypink

Dan: wrote: »

A perfect credit rating is a must.

now see, this is another reason i dont think rises are sustainable. there are so many people up to their neck in it, not great credit etc

previously, you could get out a personal loan for your deposit (or get a 100+%), be sustaining your life style on credit cards, yet still be given a mortgage

mewbie_2

Dan: wrote: »

Or you could pay 7.14% with a £495 product fee?

Remind me - what are base rates?

Graham_Devon

Dan: wrote: »

Or you could pay 7.14% with a £495 product fee?

Weather you would buy this deal is irrelevant, my point is 10% deposit mortgages are available, something you said was not the case.

Dan, that's even more expensive when you look at it over the term.

No I did not.

I said you needed double the deposit. As we all know, these 10% mortgages are just advirtisements, hardly anyone is getting them anyway, and you'd have to be pretty damned stupid to pay those ludicrous amounts.

mewbie_2

Kreator wrote: »

I'm shocked at these figures, with bank rates at 0.5% this has to be the most dangerous time in recent times...

Most dangerous time in history surely?

I believe the bull premise would be that we will have low interest rates for another year at least, and that as rates gently rise the mortgage availability will become more er. available. So gently maintaining a small level of HPI. No more crashes.

Maybe I dreamt the trillions of debt and collapsing banks - or perhaps Graham just made it all up.

Dan:_4

Graham_Devon wrote: »

I said you needed double the deposit. As we all know, these 10% mortgages are just advirtisements, hardly anyone is getting them anyway, and you'd have to be pretty damned stupid to pay those ludicrous amounts.

This is not true. Go and have a read on the mortgage board.

Graham_Devon

Kreator wrote: »

I'm shocked at these figures, with bank rates at 0.5% this has to be the most dangerous time in recent times to take the plunge, when rates rise where is this this kind of figure going to go ?, even if the banks cut their margins by 50% (which they wouldn't) if base rates went back to 5%, these mortgage rates could hit nearly 10% !!.

Now in years gone by competition for business would have stopped banks increasing their margins, but with money available to lend at less than half of what it used to be coupled with very restrictive lending conditions, it's doubtful much competition would materialise.

Looking at the product, it's 3% above base on SVR after the 3 year fix.

So a 5% base rate in 3 years, which is hardly out of the question, would mean you are paying around 8%.

Personally I can see base rates going higher than that in the next 5 years, unless something major happens or some more stimulus paves the way for artificial BOE rates.

Edit, changed moe stimulus to more stimulus, as I could forsee a bad episode of the simpsons coming up.

Graham_Devon

Dan: wrote: »

This is not true. Go and have a read on the mortgage board.

I'll pass thanks Dan. You have done enough "selling" to put me off for now

Stick to the "buy now" line, just don't actually tell someone how.

Dan:_4

Kreator wrote: »

I'm shocked at these figures, with bank rates at 0.5% this has to be the most dangerous time in recent times to take the plunge, when rates rise where is this this kind of figure going to go ?, even if the banks cut their margins by 50% (which they wouldn't) if base rates went back to 5%, these mortgage rates could hit nearly 10% !!.

Now in years gone by competition for business would have stopped banks increasing their margins, but with money available to lend at less than half of what it used to be coupled with very restrictive lending conditions, it's doubtful much competition would materialise.

Competition will materialise as the economy improves, this has already started slightly. When banks start to cempete for business again, these margins will be reduced as the base rate rises.