The real price of a mortgage: 6.49%

Yakubu22

chucky wrote: »

i got a 4.69% fixed for 5 years in Feb with the Halifax.

you can't complain after the event that mortgages aren't cheap anymore.
either you make a decision or you don't but don't complain if you haven't got a good rate if you failed to make that decision to buy.

next year the same people will be complaining that the mortgages aren't cheap again when the average rate is higher and over 7%.

Can i ask what equity you needed to get that rate?

PasturesNew

When I bought in 2000 I put down 27% deposit and was only allowed to borrow 2.5x my single salary (as I was on a 6-month contract).

chucky

penguine wrote: »

Were you a first time buyer?

The point of the article is that the low rates advertised aren't available to first time buyers, which is another factor keeping many of them out of the market. And until first time buyers return to the market in significant numbers, it ain't gonna recover.

no i wasn't a first time buyer

first time buyers are at about 35% of the market at the same level they've always been with the exception of the first few months of this year.

2001 39.5%
2002 31.9%
2003 26.1%
2004 24.9%
2005 33.8%
2006 36.6%
2007 35.4%
2008 35.2%

http://www.communities.gov.uk/documents/housing/xls/141380.xls

recover to what? who mentioned recover?

chucky

Yakubu22 wrote: »

Can i ask what equity you needed to get that rate?

i believe that it was 50% to 65%
65% to 75% was 4.89% and still a good rate

Graham_Devon

chucky wrote: »

you obviously think it's a high rate. can you explain why it is a high rate?

the base rate has nothing to do with it.

Chucky, even Libor is at 0.62%.

Yakubu22

chucky wrote: »

i believe that it was 50% to 65%
65% to 75% was 4.89% and still a good rate

IF i was looking at a mortgage i would absolutely looking towards a 5 years+ fixed.

4.69% for 5 years i think is a very shrewd deal.

StevieJ

chucky wrote: »

i got a 4.69% fixed for 5 years in Feb with the Halifax.

And the bears probably laughed at you chucky

chucky

Graham_Devon wrote: »

Chucky, even Libor is at 0.62%.

this is where you're making the wrong assumption

the Libor rate will only be linked to SVR's as Libor rates only goes out to 12 months. even here many lenders now after the Northern Rock problems don't borrow money on the money market linked to Libor.

Swap-rates is what fixed rates and most probably term trackers are derived from and the bank will put it's margin on top of this rate.

this is why there is very little correlation with the BOE base rate.

if you want to argue that the margin used by banks is excessive and expensive you would be making a much better and valid point.

tomstickland

chucky wrote: »

it has very little to do with it.

if you are so sure that it's a high rate can you explain the correlation between the base rate and the mortgage rates?

House price cheerleaders always say that because rates are so low (0.5%), prices are now affordable. It doesn't matter whether you think 6.5% is high or not, it's higher than the numbers being used for the price growth.

chucky

Yakubu22 wrote: »

IF i was looking at a mortgage i would absolutely looking towards a 5 years+ fixed.

4.69% for 5 years i think is a very shrewd deal.

which goes back to my perenial point about the total price of a house is extremely relevant to your actual mortgage rate.

StevieJ wrote: »

And the bears probably laughed at you chucky

yup they did and much more