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Shapps calls for 30 year fixed mortgages...
Graham_Devon
Posts: 58,560 Forumite
....The Guardian slams the proposals
http://www.guardian.co.uk/money/blog/2011/oct/20/30-year-fixed-rate-mortgage-shapps
Astonishingly, housing minister Grant Shapps today repeated Darling's advice. He told the Building Societies Association's annual mortgage seminar: "Longer-term mortgages – possibly as long as 30 years – could help families on tight budgets know exactly where they stand when they are buying a home, by giving them greater certainty over how much they will be paying for their home in years to come."
It's a shame Shapps can only echo the bad advice from a previous chancellor at the annual summit for lenders. There are huge problems in the housing market – not least the monstrous situation faced by would-be first-time buyers now forced into paying absurd rents for longer and longer.
Tackling the acute problems in the rental market – controlling rent rises, abolishing six-month shorthold tenancies and regulating buy to let – should be his focus, not trapping young adults into daft 25-year deals.
http://www.guardian.co.uk/money/blog/2011/oct/20/30-year-fixed-rate-mortgage-shapps
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Comments
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Why stop at 30.. Intergenerational mortgages might make things more affordable too...0
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Nothing wrong with the theory, cannot see many jumping at the thought of a 30 year fix at 8% at the moment though.0
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Nothing wrong with the theory, cannot see many jumping at the thought of a 30 year fix at 8% at the moment though.
Just goes to show how big a rip-off UK mortgage rates are at the moment.
A 30 year fixed rate mortgage in the USA is 4.5%.“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: »Just goes to show how big a rip-off UK mortgage rates are at the moment.
A 30 year fixed rate mortgage in the USA is 4.5%.
US mortgage suppliers are probably not a great example of how to run a business though.0 -
Mine isn't fixed but I only pay 0.68%, I was that ever possible in the US?0
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So what's the difference between borrowing money for 30 years on a fixed rate and paying rent for 50 years with rents increasing with or above inflation? Apart from that one is shorter and cheaper.
Sounds like quite a good idea actually, but to be honest the "monstrous" situation isn't the fault of landlords, it's the fault of the FSA for essentially stopping lending to first time buyers who are now competing against each other for rented accomodation. Not what the bears here expected at all, when cackling gleefully about the fall of buy to let empires and how this was going to reduce rents and reduce house prices.
The Guardian is, predictibly, doing what the Guardian does which is muttering hipster nonsense about rent controls, and buy to let regulation, so we can have a rental market like in Germany and France and sit in cafes talking about Sartre mon cher. Ignoring of course the structural differences here where we have a shortfall between supply and demand which puts housing at a premium however you regulate it and whether it's rented or purchased. At some point that penny has to drop.
Actually the solution for security of tenure for rental is going to end up being leasehold. That essentially fixes outlay increases (thereby meeting one of the Guardian's criteria), ends short term renting, and gives security of tenure within some limits.0 -
HAMISH_MCTAVISH wrote: »Just goes to show how big a rip-off UK mortgage rates are at the moment.
A 30 year fixed rate mortgage in the USA is 4.5%.
Haha.
Hamish now looks to the US for advice on mortgages after telling us hundreds of times the US mortage market is why we are suffering.
Doh!0 -
Graham_Devon wrote: »Haha.
Hamish now looks to the US for advice on mortgages after telling us hundreds of times the US mortage market is why we are suffering.
Doh!
Since when did I ever say long term fixed rate mortgages were the problem?
In fact I've said the exact opposite. It's short term teaser rates that amplified the US sub prime crisis.
Perhaps you'd like to explain why you think long term fixed rate mortgages are a problem?“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 -
, it's the fault of the FSA for essentially stopping lending to first time buyers .
It does appear they've realised the error of their ways.
https://forums.moneysavingexpert.com/discussion/3563543“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 -
AlsoI beleive US mortgage 'fixes' are not lock in deals but rather the borrower can remortgage penalty free at any time so not like the fixes we have in the UK at all.
It also means the consumer part of the economy is less sensitive to the short end of the interest rate curve so interest rate policy is more for business lending.I think....0
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