First-time buyers opt for longer term mortgages

MrRee_2

We are talking young people here - these are normally on payscales, annual payrises in addition to the national agreed increase.

Their future of high earning is also assured .... so, yes, it's perfectly sensible and acceptable that they stretch themselves.

Remember that every £ borrowed today turns into ££ tomorrow in equity growth.

Clever young men and women are buying right now .... whatever the fees or terms.

And no-one can blame them.

ukcarper

sulphate wrote: »

We recently took out a FTB 25yr mortgage and I thought that was long.. honestly though, we do plan on moving again within 10 years so we'll probably extend it then.

I guess that's the problem, if you already have a 35yr mortgage you may not be able to extend it... particularly if that would push you over retirement age.

You don't have to extend it I moved after 8 years and took out a 25 year mortgage.

Thrugelmir

Turnbull2000 wrote: »

Salaries weren't static back then mind.

Neither is retirement age. People will be working for far longer.

Turnbull2000

Thrugelmir wrote: »

Neither is retirement age. People will be working for far longer.

With people entering the property market at a later age, the time will have to come when we push retirement age up to around 70 to help accommodate 35-40 year terms as standard.

CLAPTON

Graham_Devon wrote: »

Nurses, IT people and general managers are all seeing pay decline. Not increase.

rubbish even now but we are talking medium term 5 or 10 or more years

plus of course inflation will reduce the debt by at least 30% over 10 years but probably much much more

Graham_Devon

CLAPTON wrote: »

rubbish even now but we are talking medium term 5 or 10 or more years

plus of course inflation will reduce the debt by at least 30% over 10 years but probably much much more

How do you know this?

How much has inflation reduced debt over the past 10 years?

For inflation to reduce debt, you have to look at wage inflation, not general inflation.

Not really sure how you can say my point about nurses, general managers and IT jobs is rubbish. It's pretty clear to most these jobs are not commanding ever higher pay structures. I mean, seriously, one of those is on a pay freeze cap for the next 2 years and has been for the previous 3.

Loughton_Monkey

ukcarper wrote: »

You don't have to extend it I moved after 8 years and took out a 25 year mortgage.

Quite agree.

It is personal choice what type of mortgage to take. Personally, I would always go for 'Offset' since it a mortgage that's 'what you want it to be'.

For someone who for some strange reason doesn't want Offset, or wants (but can't get) Interest Only, then a longer term gets you nearer to that than a standard 25 year.

The key point, though, is similar to yours. But I put it another way. If a first time buyer is planning to be in that same house in 25 years (let alone 30 or 35) then my eyebrows rise. In my early 'boomer' days, there is absolutely no way I or any of my friends would have been able to afford a house that you would want to live in for more than 5 years or so. You'd really want to trade up.

Then, as you say, remortgage for another 25 years or whatever.

The way to live comfortably (in my view) as well as obtain maximum 'oomph' from such a lucrative tax free investment as your house, the move every 4/5 years, remortgage to an amount where the pips are squeeking, and never pay a single £ of capital off until you have to. Let the mortgage inflate away.

chewmylegoff

Turnbull2000 wrote: »

Salaries weren't static back then mind.

I did expect mortgage terms to eventually rise in order to 'assist' buyer and sustain prices rises, but not until we neared affordability limits under long-term negative base rates and government backed mortgage lending.

With all these value boosters coming at once, the upcoming annual price growth could be quite significant.

Salaries aren't static now either. Sorry if yours is.

CLAPTON

Graham_Devon wrote: »

How do you know this?

How much has inflation reduced debt over the past 10 years?

For inflation to reduce debt, you have to look at wage inflation, not general inflation.

Not really sure how you can say my point about nurses, general managers and IT jobs is rubbish. It's pretty clear to most these jobs are not commanding ever higher pay structures. I mean, seriously, one of those is on a pay freeze cap for the next 2 years and has been for the previous 3.

ok what has the general wage inflation been over the last 10 years?

and looking at individual people rather than general inflation, how much have individual 'career' peoples' salary increased (so a nurse has a salary scale, he/she may be promoted over a 10 year period)

ess0two

Graham_Devon wrote: »

Brilliant news. When that';s not enough, we can simply start lifetime mortgages, enabling you to sign your kids up to pay off your debt before they can even babble a word.

As for 35 year mortgages, fine, until you want to move and realise you've paid down hardly any of the oustanding capital.

You may find it good news, but I highly doubt you'd take such a "great news" product yourself. Just hopefully others will...

More drama queen than Louis Spence.