When will interest rates rise?

lisyloo

I also dont think there is anything wrong with having a mortgage.

Of course not.
Thre is nothing wrong with debt per se provided you can afford it and have contingency plans.

i know several people who are ftb's but are only paying the interest part of the mortgage - with no means , or not being able to afford to pay back the capital , if interest rates do go up , as they surely must then these people are going to be right up the creek

If they have a variable rate mortgage then yes they will be in trouble.
But remember that most the time we know very little about other people's finances.
Someone with a nice home, might own it and have plenty in pension funds/shares/assets.
Someone else with a posh looking car might be up to their eyes in debt.

Unless you really know these people's finances personally, then you really don't know.
Appearances can be deceptive.

If they really have bought a house on I/O and a variable rate with no plans for rising interest rates from these exceptionally low levels, then I'd say that's a stunning lack of planning, but it does not suprise me.

shortchanged_2

Out of curiosisty lisyloo, how much did you pay for your 5 bedroom house back in 2003?

mbga9pgf

YEah but house prices ony ever go up innit?

A lot of youngsters on IO havent an idea what a share isa is, never mind investment strategies. They are the walking financially dead.

lisyloo

Out of curiosisty lisyloo, how much did you pay for your 5 bedroom house back in 2003?

We paid £400K.
Which was £270K mortgage and £130K part-ex of old home.

shortchanged_2

lisyloo wrote: »

We paid £400K.
Which was £270K mortgage and £130K part-ex of old home.

Which is worth what now? Around £1million+ by any chance?

lisyloo

Which is worth what now?

I believe the house to be worth circa £550K.
That price is based on a recent sale of an identically built house in the same street.
I'm relatively pleased with a 4% return per annum.
I'm sure there are plenty of "investments" that would have outstripped that but it's a home and we live in it.

Not really sure what the comment about £1million+ is getting at??
Why would I lie when it can all be checked on the web??

I've already said it's value to me is providing freedom through rent free accomodation for life.
The paper value is interesting but relatively immaterial.

What's your point?

shortchanged_2

I was just wondering because 2003 was pre boom prices and in most places house prices have doubled or even tripled since then.

Fair play to you your house must have been extremely expensive for what it was at the time back then.

mbga9pgf

Top end of the market didnt respond like that. Growth at the top was always far more stable than at the bottom. Which is why prices hardly dipped. All that happened was prices at the bottom caught up with those at the top.

Which is why a 5 bed executive makes far better sense than 2 crappy newbuild shoeboxes.

ukcarper

shortchanged wrote: »

I was just wondering because 2003 was pre boom prices and in most places house prices have doubled or even tripled since then.

Fair play to you your house must have been extremely expensive for what it was at the time back then.

According to Land Reg house prices have increased by abour 35% since 2003 so £400 to £550 looks about right.

lisyloo

I was just wondering because 2003 was pre boom prices and in most places house prices have doubled or even tripled since then.

Are you sure?
Looks like the majority of the boom was over to me.
http://www.housepricecrash.co.uk/graphs-average-house-price.php

I would be the first to admit that our market timing wasn't great, but we weren't trying to time the market, we were trying to buy a home.
Yes there are better times to have bought, but it wouldn't necesasrily have fitted in with our other financial/work/family plans.
I'm not that concerned about the price although I will be when we come to downsize in 40 years time, otherwise it's not really an issue.
BTW - the house was only built in 2003, so could not have bought it (or one as nice) pre-boom.