We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
FTB Discrimination "incredibly unfair", now pay thousands more for mortgages
HAMISH_MCTAVISH
Posts: 28,592 Forumite
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8037437/First-time-buyers-forced-to-pay-higher-premium-for-mortgages.htmlFirst-time buyers are paying thousands of pounds a year more to borrow the same amount as other borrowers, creating a generation of second-class home buyers.
Experts say it is "incredibly unfair" on the young that they are paying so much more for the same level of borrowing, just because they have smaller deposits than older home owners.
New figures for The Daily Telegraph show that the discrepancy has arisen only in the past three years – before that, first-time buyers borrowed at the same rates as others.
"We are creating a generation in which buyers are either first-class – because they have money from their parents, who owned homes before them – or second-class, because their parents cannot pass on money," warned Ray Boulger, from mortgage broker John Charcol.
"You can't now discriminate on the grounds of race or sex, but this is discriminatory in itself," he added.
He said that, for the first time, graduates might be better off not repaying student debt when they leave university, because the only chance they stand of home ownership is saving for a deposit from the age of 21.
The figures, from financial statistics group Defaqto, show that the payments on an average £150,000 repayment mortgage vary massively depending on whether you have a large deposit – typical only for those who have cashed in equity from a previous property – or a deposit of 10pc or less.
Three years ago, a borrower with a 25pc deposit would have paid almost the same interest rate for their mortgage as one with a 10pc deposit, but now the lack of funds will cost the latter an extra £2,300 a year for an average two-year fixed-rate mortgage, or £57,500 over the life of the mortgage.
And it's actually worse than the article suggests.
3 years ago, bank mortgage margins were an average of just 1% above base rate. They are now an average of 3% above base rate, and low deposit FTB's pay more like 5% or 6% above base rate.
Which equates to as much as a staggering £6,000 a year in extra interest costs on a 150K property, versus the pre-2007 buyer.
Welcome to the discriminatory world the bears made.:(
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
0
Comments
-
HAMISH_MCTAVISH wrote: »3 years ago, bank mortgage margins were an average of just 1% above base rate. They are now an average of 3% above base rate, and low deposit FTB's pay more like 5% or 6% above base rate.
Which equates to as much as a staggering £6,000 a year in extra interest costs on a 150K property, versus the pre-2007 buyer.
Welcome to the discriminatory world the bears made.:(
I'm a prospective FTB with a 20% deposit and the best rate ive been offered is 5.99% fixed for 3 yrs on a straight forward repayment...... Not quite sure why its the Bears fault though Hamish, I'm a Bear and AFAIK I haven't done anything apart from saving for a deposit.....
TBH Hamish I didn't realise I had that much influence in the banking world.:D0 -
leveller2911 wrote: »I'm a prospective FTB with a 20% deposit and the best rate ive been offered is 5.99% fixed for 3 yrs on a straight forward repayment...... Not quite sure why its the Bears fault though Hamish, I'm a Bear and AFAIK I haven't done anything apart from saving for a deposit.....
TBH Hamish I didn't realise I had that much influence in the banking world.:D
TBF, you don't really have any influence.
I'm just pointing out that the bears got what they wished for, ie, restrictive mortgage lending.
But it's a bit of a Pyrrhic Victory.;)“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »
Welcome to the discriminatory world the bears made.:(
Now even you have got me really confused this time Hamish!
Can you please explain the link? :eek:
You've seriously lost the plot now.0 -
shortchanged wrote: »Now even you have got me really confused this time Hamish!
Can you please explain the link? :eek:
You've seriously lost the plot now.
Eh?
Whats so hard to understand?
Bears wanted restricted mortgage lending.
Bears got restricted mortgage lending.
FTB's now pay more for housing than they did, and a generation are being excluded.
Simple really.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8037437/First-time-buyers-forced-to-pay-higher-premium-for-mortgages.html
And it's actually worse than the article suggests.
3 years ago, bank mortgage margins were an average of just 1% above base rate. They are now an average of 3% above base rate, and low deposit FTB's pay more like 5% or 6% above base rate.
Which equates to as much as a staggering £6,000 a year in extra interest costs on a 150K property, versus the pre-2007 buyer.
Welcome to the discriminatory world the bears made.:(
Im a ftb, I bought at 1.99% over base. Does not compute with your drivel hamish.0 -
HAMISH_MCTAVISH wrote: »Eh?
Whats so hard to understand?
Bears wanted restricted mortgage lending.
Bears got restricted mortgage lending.
FTB's now pay more for housing than they did, and a generation are being excluded.
Simple really.
:rotfl:
So the bulls had nothing to do with hyper inflation of the housing market resulting in the situation we have now.
Strange concept to grasp this one Hamish but funnily enough some people want to buy houses to LIVE IN, not just to make money from them.
If there wasn't so many greedy bast**ds out there with all their money buying up all the property making it less and less affordable for more and more we wouldn't be in this situation we are now.0 -
Im a ftb, I bought at 1.99% over base.
With a massive deposit, that took many years of saving, on dual incomes, and at far higher income than typical FTB's.
Hardly a good example.....Does not compute with your drivel hamish.
None of your drivel ever computes.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
The falling prices will help them out a bit though."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
The falling prices will help them out a bit though.
But thats the thing. The falling prices are not compensating for the increase in mortgage funding costs, based on the averages.
I have no doubt in some areas they are. But on average, they are not.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »But thats the thing. The falling prices are not compensating for the increase in mortgage funding costs, based on the averages.
But with prices continuing their fall, things will get better.
FTBs just need patience and a good deposit."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.4K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.4K Spending & Discounts
- 245.4K Work, Benefits & Business
- 601.2K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards