Halifax -0.4%.... £159,486

zagfles

chewmylegoff wrote: »

Well the outstanding mortgage of £70k was your figure not mine so I'm just using your assumption.

It was an example of how falling prices from now can benefit some people looking to move upmarket even if they haven't saved.

If they have saved, it can benefit them even more, and even if the prices falls below the buying price.

Even if they have saved money I don't see how losing a chunk of their original equity makes it easier to climb the ladder than if e.g. Prices stayed the same.

Because what they lose in equity is more than made up for by what they save in the price of their new house.

If I bought at £100k and want to buy a £200k house, I need £100k more. If prices fall 50% then I only need £50k more.

If I save £50k when buying something, I see that as quite a result:)

When prices of something have fallen 50% you are catching a falling knife by buying - banks are obviously going to want to protect themselves (the present moment being a good example when we h e flat house prices and large deposit requirements despite it looking like most of the falls that are going to happen have already happened).

So do you think if prices started rising at 10% pa again, the 125% mortgage will be back:rotfl:

chewmylegoff

zagfles wrote: »

It was an example of how falling prices from now can benefit some people looking to move upmarket even if they haven't saved.

If they have saved, it can benefit them even more, and even if the prices falls below the buying price.

yeah, it works as long as house prices have risen by more than they then fall, which is otherwise known as net positive HPI.

Because what they lose in equity is more than made up for by what they save in the price of their new house.

If I bought at £100k and want to buy a £200k house, I need £100k more. If prices fall 50% then I only need £50k more.

yeah you only need £50k more, mostly in cash, because you have got a massive wedge of negative equity so you won't be able to sell your current house without coming up with the cash to pay off the negative equity with.

If I save £50k when buying something, I see that as quite a result:)

of course. but you wouldn't be buying anything if you needed a mortgage, as most people do. (and if house prices fell 50% then the economy would be farked so i doubt you'd be :smiley facing: too much).

So do you think if prices started rising at 10% pa again, the 125% mortgage will be back:rotfl:

wow that's a lovely straw man you've built there...

do you disagree that banks are likely to require larger deposits against a backdrop of recent house price falls than they are likely to require when prices are consistently rising? history seems to disagree with you if so.

(and whilst we're being all silly, you actually are far more likely to see 125% loans if house prices are rising by 10% pa than if prices have fallen by 50% - although you are about as likely to see 125% loans in the foreseeable future (before everyone forgets what went wrong in several decades time) as you are to see nick clegg as the next PM).

zagfles

chewmylegoff wrote: »

yeah, it works as long as house prices have risen by more than they then fall, which is otherwise known as net positive HPI.

It's also known a fall from current prices. What is what you originally took issue with.

yeah you only need £50k more, mostly in cash, because you have got a massive wedge of negative equity so you won't be able to sell your current house without coming up with the cash to pay off the negative equity with.

Unless of course you've actually managed to pay off some or even most of your mortgage over the 15 years. This is actually possible you know. Have a look at the MFW board. I know several people who've paid off their entire mortgage before 15 years.

of course. but you wouldn't be buying anything if you needed a mortgage, as most people do. (and if house prices fell 50% then the economy would be farked so i doubt you'd be :smiley facing: too much).

OK 50% is an exaggeration, try 10%. A 10% fall shouldn't destroy the economy.

In the example I quoted it'd save £10k. I'd definitely be :):) even saving "just" £10k.

Much more than if prices had risen 10% and I had to borrow/beg/steal/save £10k more to get the house :(:(

wow that's a lovely straw man you've built there...

do you disagree that banks are likely to require larger deposits against a backdrop of recent house price falls than they are likely to require when prices are consistently rising? history seems to disagree with you if so.

Really? What LTV could you get in 1995 (following about 5 years of falling prices). Was it really significantly different to 1990 or 2000, after 5 years of rising prices?