Why are posters so Obsessed with House Prices?

borntobefree

Graham_Devon wrote: »

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

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

I've answered your point I think on the cost of sofa's. I did not ignore it.

stueyhants

borntobefree wrote: »

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.

IF and its a big IF, that 2% difference resides across the whole finance period. With respect to mortgages that will not be the case, the best you will achieve is 5 year advantage. Can you please stop applying your principle to the whole 25 years from now on. Thanks

borntobefree

Graham_Devon wrote: »

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.

I don't want to convince you of nothing, to be perfectly honest. Do you think it makes any difference to me if you over pay for your sofa or your house?

As a previous poster said I'm just bamboozled as to how some posters spend their every waking minute thinking about house prices.

borntobefree

stueyhants wrote: »

IF and its a big IF, that 2% difference resides across the whole finance period. With respect to mortgages that will not be the case, the best you will achieve is 5 year advantage. Can you please stop applying your principle to the whole 25 years from now on. Thanks

The sofa example was started by GofD - the whole finance period was only a year in his example.

I'll use any period you want Stuey - care to show us some figures of your own?

borntobefree

chucky wrote: »

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.

I think that many posters on this board underestimate the effect of just a half a percent movement in interest rates on a the true cost of a house.

nicko33

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?

See, you do understand.
But replace the £700 with £610 and now which one is cheaper?

The answer to which is cheaper is "it depends". It's not always the one with the cheaper ticket price, nor the one with cheaper finance.
It may well be that a cheaper ticket price is most likely to lead to an overall lower total cost, just not ALWAYS.

chucky

stueyhants wrote: »

IF and its a big IF, that 2% difference resides across the whole finance period. With respect to mortgages that will not be the case, the best you will achieve is 5 year advantage. Can you please stop applying your principle to the whole 25 years from now on. Thanks

just thinking about this... isn't it better to know what rate you'll be getting upfront for those 5 years instead of taking the risk in 5 years time?

so for example

buy now = 5 years (known interest rate) + 20 years (unknown interest rates) + fixed property price
or
delay by 5 years waiting for prices to drop = 25 years (unknown interest rates) + uncertain property price

we won't know which is better but i think you'd go for the first one (i would) if the property price was right.

davilown

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!

Who is missing out on the record low interest rates? Nobody can get any near 4.5% without 35%+ deposit and with 10% you're looking at 6%.
Most people, who are wanting to buy, are just saving as much as they can in order to get the bigger deposit.
3 years ago, I could get a 125% mortgage at 5.8% fixed.

borntobefree

chucky wrote: »

just thinking about this... isn't it better to know what rate you'll be getting upfront for those 5 years instead of taking the risk in 5 years time?

so for example

buy now = 5 years (known interest rate) + 20 years (unknown interest rates) + fixed property price
or
delay by 5 years waiting for prices to drop = 25 years (unknown interest rates + uncertain property price

we won't know which is better but i think you'd go for the first one (i would) if the property price was right.

and also take into account the cost of renting.....

chucky

borntobefree wrote: »

and also take into account the cost of renting.....

it swings in roundabouts because you lose on savings interest if you have zero HPI etc, etc, etc

i wouldn't go there though - let's keep it simple so that Graham of Devon understands...