Why are posters so Obsessed with House Prices?

borntobefree

Graham_Devon wrote: »

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.

Really? - you don't get the point?

The point is - why do you think house purchase prices are more important than interest rates ?

A 1% change in the interest rate is the equivalent of approx a 15% fall in house prices over the length of a mortgage - so when the BOE raise interst rates by just half a percent this is the equivalent to approx a 7% rise in house prices....

so why do house prices matter so much more than purchase prices?

Really2

Chaos_A.D. wrote: »

Bollox mate, never thought of that, ah well 'tis done now.

Don't worry, mine is sitting in my offset. I am no longer spreading money here there everywhere for better reward.
I like it safe and simple now. (you did the right thing;))

chucky

borntobefree wrote: »

Really? - you don't get the point?

the problem is with this kind of person is that they look at the ticket price of the house and think that's it... it's a bit more than that... point them towards an early repayment calculator and ask them to have a play around with using a low interest rate and over paying at the begining of the mortgage term...

stueyhants

borntobefree wrote: »

Really? - you don't get the point?

The point is - why do you think house purchase prices are more important than interest rates ?

A 1% change in the interest rate is the equivalent of approx a 15% fall in house prices over the length of a mortgage - so when the BOE raise interst rates by just half a percent this is the equivalent to approx a 7% rise in house prices....

so why do house prices matter so much more than purchase prices?

But why would you benefit from the 1% difference in rates for the whole mortgage period ?

person A buys now at 2% ... 2 years later
person B buys at 3% (Person A rate is 3% as well .. unless they fixed)

So person A has benefited from 2 years of 1% reduced interest rate compared to Person B, but if the house price drops in those two years all bets are off

Blacklight

Any prospective buyer with any sense has bought during this period of historically low interest rates. Just look at the people here, those that Hamish highlighted in this HPC capitulation post and even the two from moneyweek who finally bought after years of predicting massive drops.

It goes back to what I was saying yesterday about those that really wanted to buy having just drifted off, bought a place and are now getting on with their lives, leaving only the cash buyers wanting a massive economic crisis to bring property prices down to a level where they don't have to lift a finger (greed in other words).

Generali

Isn't this a little like going to the football365.co.uk website and asking why they don't discuss the cricket for once?

chucky

stueyhants wrote: »

But why would you benefit from the 1% difference in rates for the whole mortgage period ?

person A buys now at 2% ... 2 years later
person B buys at 3% (Person A rate is 3% as well .. unless they fixed)

So person A has benefited from 2 years of 1% reduced interest rate compared to Person B, but if the house price drops in those two years all bets are off

not going to go into the maths it's too long... but to add to what you say

for each 1% movement in rates on a 5 year £100k mortgage you save 5% on the house price. it gets even better when you can afford overpayments.

Graham_Devon

borntobefree wrote: »

Really? - you don't get the point?

The point is - why do you think house purchase prices are more important than interest rates ?

A 1% change in the interest rate is the equivalent of approx a 15% fall in house prices over the length of a mortgage - so when the BOE raise interst rates by just half a percent this is the equivalent to approx a 7% rise in house prices....

so why do house prices matter so much more than purchase prices?

https://forums.moneysavingexpert.com/discussion/2606759

It's all in that thread, from post 108 onwards.

Never going to get it over to a debt junkey.

But seriously, you are out buying a sofa. You see one at £600 you really like at 5% interest over 12 months.

Another is £700 and exactly the same sofa. This one is at 0.2% interest over 12 months.

Which ones cheaper? Because according to you, so far, it's the £700 one you'd be out buying and celebrating you have such a fantastic deal as you have saved on the interest.

mustrum_ridcully

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!

What's one of the best ways of saving money - paying less for what you are buying.

For the record I am a property owner yet I see lower house prices to be good thing. Don't forget what was one of the causes of the credit crunch - people having to overstrech their finances to buy a house that had gone up massively in price.

Really2

Graham_Devon wrote: »

Which ones cheaper? Because according to you, so far, it's the £700 one you'd be out buying and celebrating you have such a fantastic deal as you have saved on the interest.

That is the opposite of what he is saying. He is saying look a total cost then decide.

Not the screen price only.

I would buy the one for £600 Cash, or on a 0% credit card for 12 months TBH.:D