Barclays Mortgage Infographic

RockPaperScissors

Morning all!

This may already have been posted but I couldn't find it so forgive me if it's a dupe.

Just came accross this Barclays Mortages infographic and was wondering what you all thought?

I am intrigued by the values and am wondering what sort of deposits people have been paying for these figures. I have been looking into a first time mortgage and live roughly in the Brighton area. I am looking at far higher than their estimated average of £501 (in 2011).

Interesting to see that they are saying mortgages are at their lowest rate in a decade. Maybe now is the time for me to sort it, but I'm sure I would be looking at a higher sum that this?

What are your thoughts?

kingstreet

What you pay depends on how much you borrow, at what rate and over what term. It is therefore possible to skew any statistics to say what you want by making assumptions of these three factors which don't actually reflect reality. The result also depends on the sample size and as it's an average, there will be those who pay much more and those who pay much less. This is a general observation, not a criticism of any lender.

The better rates are available to those with a larger amount of equity in their property. Typically, a 60% loan to value sees the best rates, with a sliding scale which sees rates increasing as the loan to value increases, culminating ion the highest rates applying to borrowers with deposits of 5% - 10%.

If you are considering purchasing a property, a general view of house purchase costs appears pointless when you can quite easily carry out such calculations on a basis personal to the borrower.

If you know your deposit, if you know how much you can borrow, you can (with a fair degree of accuracy) establish the likely rate and the preferred borrowing term.

I'm sure if you set out;-

- your target purchase price and likely deposit
- your gross annual income
- your preferred mortgage term
- your credit history

there are several members here who will be able to "put some meat on the bones" of a house purchase for you.

One final comment on the Barclays data. If you were around in 1992, when the mortgage rate was 15.4%, you know that current rates in the region of 3% are likely to mean the same mortgage amount borrowed today will be a lower proportion of income, even if there had been no increase in average incomes over that twenty year intervening period. The best way to describe Barclays result here is "redundant and obvious" and an attempt to sell its mortgages, strangely enough.

RockPaperScissors

Thanks that's really useful information!!

Looks like I've got a lot of maths to get down to.

Certainly gives me a better understanding of the infographic too so thanks!