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MSE News: House prices rising again, Halifax says

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  • tgroom57
    tgroom57 Posts: 1,431 Forumite
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    nollag2006 wrote: »
    Marginally

    But when you come to remortgage in (say) two years time, house prices will be 5-10% higher and you will have paid a chunk of your mortgage off - so the rates available for 15-20% deposit mortgages will be well within your grasp.

    As for whether interest rates will rise over the next few years, I honestly doubt it until the recovery, in both house prices and the wider economy, is well underway


    Maybe things have changed since my day, but I always understood the first 2 years of a mortgage were mostly interest payments and very little of the capital sum. In which case, moving before 3 years you won't have paid any 'chunk' off at all.
  • ccbrowning
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    tgroom57 wrote: »
    Maybe things have changed since my day, but I always understood the first 2 years of a mortgage were mostly interest payments and very little of the capital sum. In which case, moving before 3 years you won't have paid any 'chunk' off at all.
    Well my plan is to buy with a small deposit and then just overpay to the maximum allowed. If you do something like that it's not so bad I don't think?
  • HAMISH_MCTAVISH
    HAMISH_MCTAVISH Posts: 28,592 Forumite
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    edited 6 February 2013 at 10:59PM
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    tgroom57 wrote: »
    Maybe things have changed since my day, but I always understood the first 2 years of a mortgage were mostly interest payments and very little of the capital sum. In which case, moving before 3 years you won't have paid any 'chunk' off at all.

    Depends on the rate. It's less in the early years, but it's not inconsequential.

    Someone who took out a typical high street repayment 2 year tracker reverting to SVR from the likes of Lloyds or Nationwide in 2007, for a 190K mortgage, would have paid over 30K off the mortgage by now and less in total including interest than average rents for a comparable house would have been since then.

    With prices now just 10% below peak and rising, they're quids in already.
    “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”
  • ruggedtoast
    ruggedtoast Posts: 9,819 Forumite
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    I am beginning to think that house prices aren't actually going to crash like they are meant to.
  • HAMISH_MCTAVISH
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    I am beginning to think that house prices aren't actually going to crash like they are meant to.

    House prices did crash.

    We've been bumping along the bottom for the last 4 years.

    Now they're rising again.
    “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”
  • marathonic
    marathonic Posts: 1,778 Forumite
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    I am beginning to think that house prices aren't actually going to crash like they are meant to.

    My house was on the market as a new build in 2007 for 250k. I had an offer accepted last year for 125k.

    This was in Northern Ireland which is a special case but prices have crashed in a lot of regions outside London, albeit, not at the rate in Northern Ireland.
  • HAMISH_MCTAVISH
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    marathonic wrote: »
    prices have crashed in a lot of regions outside London, albeit, not at the rate in Northern Ireland.

    London is pretty much back to peak. Some parts above previous peak.

    Most of the Uk hasn't fallen very much, and is now 10% to 12% or so below peak. Many parts have recovered by more than that, my own area is a very long way from London and is now well above the old 2007 peak.

    Only NI and a few post industrial wastelands "oop north" have seen significant price falls.
    “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”
  • Tancred
    Tancred Posts: 1,424 Forumite
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    sterl1ng wrote: »
    Yes but surely then I will have higher interest rate to pay versus say a 15% deposit?

    That's true, but you will also need money for other expenses. If you can afford it then fair enough, but if not, then don't stretch yourself to the limit.
  • Tancred
    Tancred Posts: 1,424 Forumite
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    I am beginning to think that house prices aren't actually going to crash like they are meant to.

    There is a lot of pent-up demand in the market. Many people want to buy but are either financially challenged or are being extremely fussy. I don't see any big rises this year, except possibly in London, which is a very unusual market due to the high number of wealthy and foreign buuyers. There will probably be a modest price rise in the UK overall, but not exceeding general inflation.
  • tgroom57
    tgroom57 Posts: 1,431 Forumite
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    Depends on the rate. It's less in the early years, but it's not inconsequential.

    Someone who took out a typical high street repayment 2 year tracker reverting to SVR from the likes of Lloyds or Nationwide in 2007, for a 190K mortgage, would have paid over 30K off the mortgage by now and less in total including interest than average rents for a comparable house would have been since then.

    With prices now just 10% below peak and rising, they're quids in already.

    The example you give means they've been paying off for 5 or 6 years, not 2 or 3. I agree with your other comments, and that buying -if you can - is a better option than renting.
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