CITY AM--- Housing no longer overvalued

Mr_Matey

chucky wrote: »

would you?? repayments are below

100k loan at 15% = £1,289.16
200k loan at 7.5% = £1,495.17

the difference between the two is only £200 a month which only needs 1% wage inflation over 15 years to be cheaper.

seeing that wage inflation was over 1% per year - i'd rather a mortgage now

You're forgetting overpayments. If you can pay a bit more than the minimum you'd demolish the first loan a lot quicker than the second.

I'd prefer the first one too, even if rates were to remain the same throughout the loan period.

JayScottGreenspan

HAMISH_MCTAVISH wrote: »

From todays Halifax report......

Nationally, typical mortgage payments for a new borrower have fallen from a peak of 48% of average disposable earnings in 2007 Quarter 3 to 29% in August 2009.

So they are only giving mortgages to rich people with big deposits and big pay packets?

In other news, as long as interest rates stay at lowest-ever-levels BTLers will break even after costs.

chucky

the_ash_and_the_oak wrote: »

perhaps.

I'd just rather (at least hypothetically) borrow when rates are at their highest and have done their damage to prices (and then as they gradually come down let their lowering have a positive effect on the prices themselves)

but how would you have known rates were going to come down?

hindsight?

the_ash_and_the_oak

chucky wrote: »

but how would you have known rates were going to come down?

hindsight?

I wouldnt know. (also I haven't really been able to use hindsight w much success tbh)

the gamble would be at 15% direction more likely to be downwards than up

and that at 1% the direction would be more likely to rise than fall

chucky

the_ash_and_the_oak wrote: »

I wouldnt know. (also I haven't really been able to use hindsight w much success tbh)

the gamble would be at 15% direction more likely to be downwards than up

and that at 1% the direction would be more likely to rise than fall

i do understand your point but it stayed at 15 for 8 months and didn't go under 10% for nearly 3 years.

that wouldn't have been a cheap mortgage

HAMISH_MCTAVISH

chucky wrote: »

i do understand your point but it stayed at 15 for 8 months and didn't go under 10% for nearly 3 years.

that wouldn't have been a cheap mortgage

Whereas the one that started at 6%, dropped to 1%, and didn't go above 5% for another 5 years would be one of the cheapest mortgages in history....:D

The savings for anyone that took out a tracker in 2007 will more than pay for the small drops in average prices experienced by most people to date, versus those who bought a little cheaper but got stuck with higher rates.

abaxas

HAMISH_MCTAVISH wrote: »

Whereas the one that started at 6%, dropped to 1%, and didn't go above 5% for another 5 years would be one of the cheapest mortgages in history....:D

The savings for anyone that took out a tracker in 2007 will more than pay for the small drops in average prices experienced by most people to date, versus those who bought a little cheaper but got stuck with higher rates.

What about the sub prime people currently on 9-12% mortgages? Or should we just forget about them?

chucky

abaxas wrote: »

What about the sub prime people currently on 9-12% mortgages? Or should we just forget about them?

true!! a good point!! what about the people on minimum wage - they need to afford property.

geoffky

chucky wrote: »

true!! a good point!! what about the people on minimum wage - they need to afford property.

And why not..they deserve a house just as much as anyone unless you believe we are not all born equal and you deserve more than other people..

chucky

geoffky wrote: »

And why not..they deserve a house just as much as anyone unless you believe we are not all born equal and you deserve more than other people..

sorry i forgot it's all about affordability innit Geoffrey