Wake up Bears its feeding time

carolt

chucky wrote: »

that wasn't and isn't the point that you raised...

the point was that the cheaper long term fixes are only really available when HPI is in full flow. so more expensive house prices cheap loans.

long term fixes are more expensive as house prices are cheaper. cheaper house prices more expensive mortgages.

Not really this time round - not sure it was ever true - as this time, once the economy recovers, and house prices with them, the interest rates will be whacked up - they're just waiting for the economy to recover from the doldrums before this happens.

We all know this.

chucky

carolt wrote: »

Not really this time round - not sure it was ever true - as this time, once the economy recovers, and house prices with them, the interest rates will be whacked up - they're just waiting for the economy to recover from the doldrums before this happens.

We all know this.

that answers the question if cheap long term fixes will be available or not.
if house prices remain "low", it will unlikely that they will be available as interest rates go up, therefore your cheap fixed rate won't be available.

it's very rare that you can benefit from low house prices and low rates.

Thrugelmir

HammerSmashedFace wrote: »

Agree, and with people being 'encouraged' to take on more debt on the back of the 'rises' in the market, whilst IR's have nowhere to go only upwards over the period of their 25 year mortgage, the chances of many hundred's of thousands not being being able to afford those mortgages as time passes will increase significantly.

The problems already exist. The potential bomb is ticking with over stretched borrowers ( mortgage and other debt) hanging on. The majority of people with financial issues have other debts. Thats is a recognised fact.

New borrowers are being screened better and putting down bigger deposits and borrowing a lower LTV.

The longer rates remain low the higher the chance that the market will normalise without a sudden drop.

IveSeenTheLight

Dan: wrote: »

It's very simple Graham - something called SUPPLY AND DEMAND. Nothing can change how the market works.

As for whether it's a good thing or not, I wouldn't worry about something that's out your control.

:yawn: This has been explained to GD so many times by various people yet he still doesn't understand it.

As Vic Reeves used to say, "let it lie"

Harry_Powell

HammerSmashedFace wrote: »

Agree, and with people being 'encouraged' to take on more debt on the back of the 'rises' in the market, whilst IR's have nowhere to go only upwards over the period of their 25 year mortgage, the chances of many hundred's of thousands not being being able to afford those mortgages as time passes will increase significantly.

Actually, my mortgage IR has nowhere to go but downwards, especially once I make in-roads into my repayments and decrease my LTV. I will get a much better interest rate with a 60% LTV than I'll get with a 95% LTV.

A lot of renters (me included, before I actually started to look at actual mortgage rates) seem to think that every OO has a mortgage rate at .5% and will be crucified when it goes up to an almighty 5%. In reality, many people are not benefitting from the low BoE rates and have a mortgage rate over 5% already. The banks are able to do this because the government are letting them, the government are letting them because many voters are happy to pay 5% on their mortgages and so are not hasslign their MPs. I believe that when the BoE rate starts to rise, the banks will have to soak up some of the rises rather than pass them on. If the BoE rate goes to 5%, do you think the government and their customers will allow the banks to keep their current margins and push 10% to 12% mortgage rates onto people?

No, if BoE rates go back to the 5% mark, the banks margins will return to normal and people will have 6% to 8% mortgages.

the_ash_and_the_oak

Harry_Powell wrote: »

No, if BoE rates go back to the 5% mark, the banks margins will return to normal and people will have 6% to 8% mortgages.

agree that people (other than some on trackers - but certainly not anyone borrowing today) are not paying 0.5% but more like 5-6% for new borrowers. (though if people borrowing at 5% in 2009 are paying 8% in 2012 that is still up to a 60% rise in interest payments - depending how much capital people are able to pay down during those first 3 years)

Wookster

Harry_Powell wrote: »

No, if BoE rates go back to the 5% mark, the banks margins will return to normal and people will have 6% to 8% mortgages.

And house prices will surely go through the roof with interest rates at 6-8%!

Harry_Powell

Wookster wrote: »

And house prices will surely go through the roof with interest rates at 6-8%!

I never said anything about house prices

Thrugelmir

Harry_Powell wrote: »

No, if BoE rates go back to the 5% mark, the banks margins will return to normal and people will have 6% to 8% mortgages.

1% above base? Days are over for these rates.

At 5%. Expect a spread nearer 7% to 9% for the majority of lending. With even good rates including product fees nearer 2.5% above base.

As you say though. Make paying down debt a priority as the longer term savings will be considerable.

Graham_Devon

What happens to the people who are "would be repo's"?

Do they ever have to pay back their missed payments? Or does it get written off? Does it get added to the mortgage?

So say they miss a payment of £600 this month, does £600 get added to their mortgage? I'm not sure that's actually possible for the banks to do that?

Or, as its NR thats holding back most repo's, are we, the taxpayer, simply paying these people mortgages until a certain point?