Why are posters so Obsessed with House Prices?

stueyhants

chucky wrote: »

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.

I'm guessing from your reply your talking about a 5 year fixed. I thought we were told by posters on here that when IR rose that fixed rates wouldn't go up a lot because of the increase competition in the morgage market The banks would somehow absorb that increase by reduced margins.

chucky

Graham_Devon wrote: »

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.

why don't you think a bit more about it

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.

it all depends on how much you pay for a property and the interest rate.

it's not so black and white as you're trying to make it...

Graham_Devon wrote: »

Never going to get it over to a debt junkey.

oh dear...

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...

chucky

stueyhants wrote: »

I'm guessing from your reply your talking about a 5 year fixed. I thought we were told by posters on here that when IR rose that fixed rates wouldn't go up a lot because of the increase competition in the morgage market The banks would somehow absorb that increase by reduced margins.

i never said it was a bad thing or a good thing.
people can make their own mind up by looking at the mortgage rate and the property price. it's up to them.

i just wanted to put a realistic example in there instead of talking about £700 sofas

Thrugelmir

Graham_Devon wrote: »

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.

Just why DFS is so successful in selling a £150 to make sofas for a £1,000 on 4 years interest "free" credit.

As in fact there'll immediately pocket £700 and the finance house takes £300 over the next 48 months. .

Really2

mustrum_ridcully wrote: »

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.

Not 100% true, it was money being lent to people who in reality should never have been lent to.
People always have a desire to buy, but in reality not all should be lent too, that is what happened. Basically all were lent too as banks saw houses as safe bets.

I would say it was lending to the wrong people, at the wrong rate with no deposit (or giving them cash back) was more the problem.

People can still get high multiples if they have the LTV to secure it.

borntobefree

Generali wrote: »

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

This is a money saving website. To me it makes no sense to worry about purchase prices so obsessively.

The difference of just half a percent between 3% and 3.5% is interest of £15,849 over the life time of a mortgage on a £200k loan! That's the equivalent of a rise in a £200k house of 8%! Yet posters on here get excited about a 0.1% drop in house prices. I don't get it!

borntobefree

Graham_Devon wrote: »

Never going to get it over to a debt junkey.

How rude! Is that the limit of your ability?

chucky

borntobefree wrote: »

This is a money saving website. To me it makes no sense to worry about purchase prices so obsessively.

The difference of just half a percent between 3% and 3.5% is interest of £15,849 over the life time of a mortgage on a £200k loan! That's the equivalent of a rise in a £200k house of 8%! Yet posters on here get excited about a 0.1% drop in house prices. I don't get it!

despite me agreeing with your logic in the short and medium term, i'm not so sure long term - it's a tough one because after your fixed mortgage period you are less in control of interest rates.

Graham_Devon

borntobefree wrote: »

How rude! Is that the limit of your ability?

You keep saying the same thing over and over again to anyone who responds. You want to convince us that its only the interest rate that matters. You are trying to use debt and interest rates to spin that house prices have fallen if interest rates move. Even using interest rates that don't even exist on any product to make the point.

My question about the sofa's was extremely simple and you completely ignored it.

So yes, it's the limit of my ability.

borntobefree

Graham_Devon wrote: »

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.

Is that 5% versus 0.2%? Then obviously sofa A is cheapest 'cos the total cost is £605 vs £714.

But it's more like this

Sofa A costs £600 at 4% = £604
Sofa B costs £570 at 6% = £604

The 5% drop in the cost of the sofa is equal to the 2% extra in interest.