Why are posters so Obsessed with House Prices?

chucky

Graham_Devon wrote: »

Who are you trying ton convince? Apart from yourselves.

errr nobody... the post was saying that the same people that complain about mortgage rates being too high are the same ones that are complaining that savings rates are too low...

that's not trying to convince anyone, just stating a fact... you can't have a high savings rates with low mortgage rates... did you not know that?

what was your muddling point Mr Muddle?

borntobefree

Chaos_A.D. wrote: »

I'm not obsessed with prices, more like I'm hanging around to see what I predicted last year to play out, and it's already on it's way. By the way, good luck on that 25 year 2% mortgage, cloud cuckoo land indeed.

Whilst you are obsessing about house purchase prices you are missing out on record low interest rates. This isn't HPC it's Money Saving Expert!

Graham_Devon

borntobefree wrote: »

So on a £200,000 mortgage this is the interest you pay over 25 years

1% £26,122
2% £54,313
3% £84,526
4% £116,701
5% £150,754
6% £186,580
7% £224,068
8% £263,089



So what matters more - the cost of the house or the interest rate you get?

The difference between the 1% and the 8% is more than the purchase price of the home!

The cost of the house ALWAYS matters more.

Reasons being:
1. You will need to buy the house in the first place. The larger the house cost, the larger the deposit required.
2. The larger the house cost, the larger the stamp duty.
3. The larger the mortgage, the larger the interest.
4. The larger the deposit you require, quite possibly the higher LTV you will have.

Whichever way people care to look at it, it's not cheaper to buy a house at a high price JUST because interest rates are low.

All that is being discussed here, is larger debt. No one seems to take this in. WHY would you want larger debt? Why is larger debt, regardless of the very current interest rate, a good thing?

borntobefree

Graham_Devon wrote: »

The cost of the house ALWAYS matters more.

Reasons being:
1. You will need to buy the house in the first place. The larger the house cost, the larger the deposit required.
2. The larger the house cost, the larger the stamp duty.
3. The larger the mortgage, the larger the interest.
4. The larger the deposit you require, quite possibly the higher LTV you will have.

Whichever way people care to look at it, it's not cheaper to buy a house at a high price JUST because interest rates are low.

So show me the figures?

A house at 1% costs £226K - the same house at 8% costs £463K. A difference of £237K.

A less extreme example - the same house at 3% costs £285k at 4% £317K a difference of £32K! That's equivalent to a 16% drop in house prices and that doesn't even take into account all the rent you paid out when you weren't buying!

Thrugelmir

borntobefree wrote: »

Whilst you are obsessing about house purchase prices you are missing out on record low interest rates. This isn't HPC it's Money Saving Expert!

I'm still averaging over 6% "interest" with my current ISA investments despite BP's dividend demise.

In fact I'm seriously considering LloydsHBOS as an investment again. As all those poor borrowers who have a huge amount of money to repay on their mortgages over the next 15 -20 years, will provide me with a good income.

Really2

Chaos_A.D. wrote: »

Mate I already own outright and I didn't take out a mortgage, borrowing rates are irrelevant to me as I don't owe anybody anything and never will, how MSE is that

See you missed a trick AD, you should have remortgaged 75% on a boe .49 tracker and fixed the cash in a high interest account.
Now that would be seriously MSE

The_White_Horse

this is the house price board. if you go to the elephant board, you will find people there are obsessed with elephants.

Graham_Devon

borntobefree wrote: »

So show me the figures?

A house at 1% costs £226K - the same house at 8% costs £463K. A difference of £237K.

A less extreme example - the same house at 3% costs £285k at 4% £317K a difference of £32K! That's equivalent to a 16% drop in house prices and that doesn't even take into account all the rent you paid out when you weren't buying!

I'm not sure what the point is here. It has no relevance to what I said. You are just fixated on the interest rate and nothing more. You haven't considered the actual purchase price. As nearlynew would say, typical debt junkie stuff

What's more you can't get 1% or 3% mortgages, so again, not sure what the point is.

iB1

The_White_Horse wrote: »

this is the house price board. if you go to the elephant board, you will find people there are obsessed with elephants.

There's an elephant board? :eek: Why didn't anyone tell me!

Really2

I think the point is to clear it up.
That people fixate on the purchase price more than the mortgage rates.
I know people now who do not shop around for mortgages.
So the point is you have to take in to account TCO.

Eg if you have been on a 0.99% mortgage for last 2 years you will have paid nearly £4,000 interest.

If I was on a 5.5% fixed (like I was) over the same period you would have paid £22,000 interest.

So you have saved in reality £18,000 of repayments (which you could have used to overpay)In two years

All figures based on IO for simplicity on £200K.