More rationing

Graham_Devon

Under more rationing, the Skipton BS has released a new product.

2 year fixed rate, 3.99%, NO fee, 90% LTV.

You even get £160 cashback, just like 2007.

Looks a bit scary when you go onto the SVR rate, considering it's 5.49% now with base rates at 0.5%! But hey, who cares! People just cope...

:beer:

PaulF81

pretty crud rate...

ukcarper

A £150k mortgage at 3.99% is £799 a month with a 4x mortgage you would need to be earning £37.5k a year £2360 a month take home leaving £1561 to live on.

At 5.49% the mortgage increases to £930 leaving £1430 at 8% it increases to £1170 leaving £1190 which is £100 a month more than someone earning £15k a year takes home. So some scope to cope.

Graham_Devon

Well, you'd rather hope that a household with a household income above the UK average could cope when buying a house priced less than UK average....wouldn't you?

ukcarper

Graham_Devon wrote: »

Well, you'd rather hope that a household with a household income above the UK average could cope when buying a house priced less than UK average....wouldn't you?

Used average price £166k less 10% deposit. £37.5k less than 2x median.

All I'm trying to show is that if they earn enough to get mortgage there is scope to cope with higher interest rates.

Median Male full time 2111 £28.4k Female £22.9k or 30% percentile Male £21.7k Female £17.6k.

michaels

Or how about today

Chelsea Building Society, 2 year fix 1.84%.........85% LTV!!!!!!

Mr._Pricklepants

michaels wrote: »

Or how about today

Chelsea Building Society, 2 year fix 1.84%.........85% LTV!!!!!!

My mate got a 2 year fix with Tesco at 1.74% and with the clubcard double your points thingamabob is effectively being paid to live in his house. :beer:

Percy1983

Don't forget its only pure luck if you get accepted, applying at 20:34 on a thursday increases your odds... or something like that.

Hamish knows how this "pure luck credit files have nothing to do with it" system works.

ging84

Mr._Pricklepants wrote: »

My mate got a 2 year fix with Tesco at 1.74% and with the clubcard double your points thingamabob is effectively being paid to live in his house. :beer:

almost had me believing it, had to run it through a couple of times in my head

if your friend is getting club card points on his mortgage payments he is likely getting a point which could be worth 2p for every £1 he pays on his monthly payments effectively giving him 2% cash back, however that is 2% of his annual premium not the full loan amount, a nice incentive but not quite as good as made out.
The only way they'd be paying him to live in his house would be if it was a 1 year mortgage, as in all paid off in a year, not 1 year fixed

SolidShot

Graham_Devon wrote: »

Well, you'd rather hope that a household with a household income above the UK average could cope when buying a house priced less than UK average....wouldn't you?

It just shows there is something out of whack between average house prices and average wages compared to the long term norm.

IveSeenTheLight

SolidShot wrote: »

It just shows there is something out of whack between average house prices and average wages compared to the long term norm.

Interesting perception.
How would you qualify your statement?

Looking at the data available here
http://www.lloydsbankinggroup.com/media/excel/2013/250413Affordability.xls

It shows the House Price compared to Average Earnings as being slightly higher than the long term average


However the same data file also shows that the Mortgage Repayments as a percentage of income is below the long term average


Can you please extrapolate further your theory that "there is something out of whack between average house prices and average wages compared to the long term norm"