The real price of a mortgage: 6.49%

Graham_Devon

Heyman wrote: »

If only you could do the same with your own posts :rolleyes:

Looks like they are upsetting you a little too much.

I apologise. I will post a "Woopeeeee, house prices up, only 20% of the nation can now afford a roof" thread tommorow.

andykn

Graham_Devon wrote: »

However, that does not detract from the point that the mortgage rates are expensive set against the base rates.

I put the 0.5% base rate and a mortgage rate of 6.49% into excel then tried to find the "set against" function to see if the answer was "expensive".

Look at it this way, which scenario has the "highest" [mortgage] rates:

Mortgage rate 10% (Bank of England base rate 6%)

Mortgage rate 6.49% (Bank of England base rate 0.5%).

Given the context "we...have...high [mortgage] interest rates"

Graham_Devon

andykn wrote: »

I put the 0.5% base rate and a mortgage rate of 6.49% into excel then tried to find the "set against" function to see if the answer was "expensive".

Look at it this way, which scenario has the "highest" [mortgage] rates:

Mortgage rate 10% (Bank of England base rate 6%)

Mortgage rate 6.49% (Bank of England base rate 0.5%).

Given the context "we...have...high [mortgage] interest rates"

It's polite to have a choice of four answers. Plus, phone a friend.

In other words, what kind of question is that? It's not, it's you trying to convince.

The answer however, is the later.

StevieJ

andykn wrote: »

I put the 0.5% base rate and a mortgage rate of 6.49% into excel then tried to find the "set against" function to see if the answer was "expensive".

Look at it this way, which scenario has the "highest" [mortgage] rates:

Mortgage rate 10% (Bank of England base rate 6%)

Mortgage rate 6.49% (Bank of England base rate 0.5%).

Given the context "we...have...high [mortgage] interest rates"

I think I will take the 6.49% high mortgage rate, you can have the low 10%

zappahey

andykn wrote: »

That doesn't make it a high mortgage rate, especially not in context.

Well, that's the thing about context, much like perspective, it depends on how you look at it.

In the context of 15% rates it isn't all that high but to "oldies" like me, who still have the mindset that mortgage rates are closely coupled to base rates (as they were when my parents first bought), it feels like a complete rip off.

purch

They've changed the rules.

Mortgage funding will become harder and harder to source.

What we have seen in the past 18 months is just a taster.

andykn

zappahey wrote: »

Well, that's the thing about context, much like perspective, it depends on how you look at it.

In the context of 15% rates it isn't all that high but to "oldies" like me, who still have the mindset that mortgage rates are closely coupled to base rates (as they were when my parents first bought), it feels like a complete rip off.

I make no comment as to whether it's a rip off or not. Just that, in the context of the article this thread is all about, the suggestion that a mortgage rate of 6.49% is "high" is just rubbish.

The margin on that mortgage maybe high but as a mortgage rate it ain't high.

the_ash_and_the_oak

chucky wrote: »

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

pretty much agree w this - a rate is neither high nor low without the context of the capital outlay

(tho judged purely on its own terms 6.49 would probably describe 6.49 as average - over the long term)

the_ash_and_the_oak

chucky wrote: »

please explain - it's only the more negative posters and the HPC ghetto are the only ones who mention 0.5%. no-one else.

many real life examples are out there of sub 6% mortgage rates.

not really sure about this - think this was mentioned a lot in terms of people on trackers, as in for a lot of people this helped a lot with monthly payments and reducing any potential trouble for those particular owners (not sure this is a negative point per se to bring up)

the_ash_and_the_oak

HAMISH_MCTAVISH wrote: »

Oh good.

Perhaps now we can put to bed that silly bear meme claiming affordability for FTB's is down to record low interest rates.:rolleyes:

no not really tbh - think any meme about low interest rates really applying only to existing owners (eg points about tracker mortgages etc)