Interest rate pain.

doitmyself

You're right, estimate, or guess in other words is what people do because frankly they have to.
Add to that the fact that many people, perhaps most aren't that astute or even interested in money matters and your current mortgage rate may depend on little more than what the bloke down the pub said.

The odds of flipping heads or the toast landing butter side down are exactly, or, allowing for the aerodynamic impact of the butter perhaps, roughly 50/50.
The odds of the mortgage rate going up or down are dependent on many and more complex factors (I don't pretend to know what they are btw .

Melissa made a valid point about calculating the payments at (+whatever%) to determine where the pain starts but it's an unknown quantity and may never happen anyway. Buying a home is a very aspirational thing and people are always optimistic (good job too!), - better job, promotion, bonus etc. etc. so, back the original post, those of us that are in are in and will benefit or suffer virtue of our decisions, and the newbies will keep on coming. IMO

Generali

doitmyself wrote: »

You're right, estimate, or guess in other words is what people do because frankly they have to.
Add to that the fact that many people, perhaps most aren't that astute or even interested in money matters and your current mortgage rate may depend on little more than what the bloke down the pub said.

The odds of flipping heads or the toast landing butter side down are exactly, or, allowing for the aerodynamic impact of the butter perhaps, roughly 50/50.
The odds of the mortgage rate going up or down are dependent on many and more complex factors (I don't pretend to know what they are btw .

Melissa made a valid point about calculating the payments at (+whatever%) to determine where the pain starts but it's an unknown quantity and may never happen anyway. Buying a home is a very aspirational thing and people are always optimistic (good job too!), - better job, promotion, bonus etc. etc. so, back the original post, those of us that are in are in and will benefit or suffer virtue of our decisions, and the newbies will keep on coming. IMO

For these reasons, I've always found it amazing that the Man on the Clapham Omnibus doesn't get a long term fixed rate mortgage. If you fix your repayments and get decent insurance, you should never lose your house unless you really mess things up.

doitmyself

Right again Generali. I replied to a guy (I think guy) last night who had an existing 3 year personal car loan (guessing around 6-7%) but who, quote 'Refused' to pay the 11.9% the same company quoted him for extending the loan, at his request to 5 years. The loan amount was obviously so small as for the increased int rate to be totally insignificant, but people always want the 'best' deal available.

The fact they often shoot themselves in the nuts while pursuing the 'best' deal instead of stopping and thinking for a moment and applying a bit of common is not something that frankly occurs to some people...