People will adjust their spending habits in order to afford their mortgage

Graham_Devon

CLAPTON wrote: »

is it?

I can't see that bit but anyway the conclusion is the same, without knowing people's income and general circumstances (children etc) it's impossible to say.

Well, were talking in general. Obviously i'm not looking for specific figures for each family, but a general household. Just ideas on what could actually be cut back for a general household.

Cornucopia

robmatic wrote: »

If only someone could invent some form of mortgage that had an interest rate that was fixed for a period of time...

I agree - for anyone remotely nervous about rates, there are a variety of good deals for medium-long term fixes...

5 year fix @ 2.74%
10 year fix @ 3.89%

Historically, mortgage rates were higher and more volatile. And yet people survived.

CLAPTON

Graham_Devon wrote: »

Well, were talking in general. Obviously i'm not looking for specific figures for each family, but a general household. Just ideas on what could actually be cut back for a general household.

in general we are very rich with a lot of un-necessary spending

so one could start by cutting out things we didn't have 10 years ago

sky 70 pm
mobile 40 pm
broadband 20 pm

that's 130 pm for things no-one knew they needed just a short time ago.

plus cut down on going out, ready meals, take aways etc

cycle rather than go by car

cut down on gas and electricity

take up running rather than a sports club

etc

Graham_Devon

CLAPTON wrote: »

in general we are very rich with a lot of un-necessary spending

so one could start by cutting out things we didn't have 10 years ago

sky 70 pm
mobile 40 pm
broadband 20 pm

that's 130 pm for things no-one knew they needed just a short time ago.

plus cut down on going out, ready meals, take aways etc

cycle rather than go by car

cut down on gas and electricity

take up running rather than a sports club

etc

Cheers. I thought we were never going to get any answers!

The only issue I'd take with your thoughts is that not many will have sky and certainly not at £70 per month in the first place, not many will actually have gym memberships and not many will be able to cut back any further on gas and electric....though I did hear something on the radio this morning about cutting out your hot water altogether in this weather to save domestic energy costs, which I thought a little extreme!

Broadband and mobile is a difficult one. I know I need them. Whether my employer would stump up for them on my behalf if I refused to purchase them is another matter. But it's kind of expected of me to have this to enable me to work from home...which cuts travel costs.

Life would certainly be difficult without broadband and mobiles now anyway....though I guess if needs must...

But I can onmly really see £100-150 that you have listed that could actually be cut for the average family. Cycling to work is an option for the absolute minority - though nice if you live so close to work.

Were kinda at the point I wanted this thread to go to though, as it's very easy to say families will just cut back to pay their mortgages. But surely if a family has to cut back to pay their mortgage, and haven't got this money as surplus, they won't be spending money on stuff like your £70 a month sky and gym memberships in the first place? Surely they would have cut those things back already to allow themselves a small surplus in their budget each month? People already have cut back, hence all the reports about spending and the high street suffering etc.

So what;s left to cut back on that isn't food, cloths, energy? And like you say, maybe their mobile and broadband, phone line?

antrobus

robmatic wrote: »

If only someone could invent some form of mortgage that had an interest rate that was fixed for a period of time...

I recall that a certain Alistair Darling was once very keen on 25 year mortgages. But that was in July 2007, just before the wheels came off the bus. The Nationwide were offering them at 6.39% at the time. I imagine anyone who took one out has been regretting that decision.

grizzly1911

CLAPTON wrote: »

in general we are very rich with a lot of un-necessary spending

so one could start by cutting out things we didn't have 10 years ago

sky 70 pm
mobile 40 pm
broadband 20 pm

that's 130 pm for things no-one knew they needed just a short time ago.

plus cut down on going out, ready meals, take aways etc

cycle rather than go by car

cut down on gas and electricity

take up running rather than a sports club

etc

Depends if you had these things to start with.

Not so sure about broadband though in this day and age.

ukcarper

To get that £150k mortgage they would need to be earning £37.5k a take home of £2360(more if it is two people working) leaving £1239 after mortgage payments at 7.5%.

If you take off 8% for mortgage as you suggest the take home falls to £2189 leaving £1068. which is about what someone of £15k gets without allowing for a pension.

Graham_Devon

ukcarper wrote: »

To get that £150k mortgage they would need to be earning £37.5k a take home of £2360(more if it is two people working) leaving £1239 after mortgage payments at 7.5%.

If you take off 8% for mortgage as you suggest the take home falls to £2189 leaving £1068. which is about what someone of £15k gets without allowing for a pension.

And do you think they would have spare capactiy from this £1068 to find £177 extra per month for the mortgage?

Or if rates hit the below average giddy heights of 5%, £300 extra per month?

ukcarper

Graham_Devon wrote: »

And do you think they would have spare capactiy from this £1068 to find £177 extra per month for the mortgage?

Or if rates hit the below average giddy heights of 5%, £300 extra per month?

That £1068 is based on 7.5%

CLAPTON

grizzly1911 wrote: »

Depends if you had these things to start with.

Not so sure about broadband though in this day and age.

in concept

broadband or lose your house?

difficult choice