Buying cheaper than social housing for half the country

Dan83

Yeah it's the same in my cul-de-sac.

cells

With interest rates on 10% down purchases now closer to 2% the figures are still great. in most the country, the north, the midlands, wales, Scotland, NI its very affordable

A £100k 30-year REPAYMENT mortgage with 2% interest rates is only £370 a month. £100k mortgage plus a deposit will get you the local terrace in most parts of the country with a monthly bill in the region of social rents and you actually get a house at the end of it.

kinger101

cells wrote: »

With interest rates on 10% down purchases now closer to 2% the figures are still great. in most the country, the north, the midlands, wales, Scotland, NI its very affordable

A £100k 30-year REPAYMENT mortgage with 2% interest rates is only £370 a month. £100k mortgage plus a deposit will get you the local terrace in most parts of the country with a monthly bill in the region of social rents and you actually get a house at the end of it.

The BBC's calculator disagrees.

http://www.bbc.co.uk/news/business-23234033

And I suspect the BBC's model doesn't even factor in that lenders aren't only concerned about whether you can make repayments at today's interest rates.

cells

kinger101 wrote: »

The BBC's calculator disagrees.

http://www.bbc.co.uk/news/business-23234033

And I suspect the BBC's model doesn't even factor in that lenders aren't only concerned about whether you can make repayments at today's interest rates.

should people decide on actual payments or figments of imagination by a regulator?

kinger101

cells wrote: »

should people decide on actual payments or figments of imagination by a regulator?

Unless you fix for the entire period of the mortgage, actual payments are not defined anywhere within your lending agreement. The underwriter decides what you can afford in line within their employer's and FSA guidelines. There are very few, if any, 30 year fixes on the market. I'm positive there are none at 2%.

If you buy a house without imagining the repayments might go higher, you're on very thin ice. Having seem what happened last time neither lenders or borrowers imagined repayments might not go up after their mortgage fix ended, I'm kinda glad the regulators have put some checks in.

cells

kinger101 wrote: »

Unless you fix for the entire period of the mortgage, actual payments are not defined anywhere within your lending agreement. The underwriter decides what you can afford in line within their employer's and FSA guidelines. There are very few, if any, 30 year fixes on the market. I'm positive there are none at 2%.

If you buy a house without imagining the repayments might go higher, you're on very thin ice. Having seem what happened last time neither lenders or borrowers imagined repayments might not go up after their mortgage fix ended, I'm kinda glad the regulators have put some checks in.

You dont know if rates will go up, they could go down further.
either way social rents go up, they are up 62% in my borough over the last 10 years.

So you have a choice of buying today, at interest costs well below social rents. You take the risk of rates increasing but they might not, you avoid the certainty of increasing social rents.


A £100k mortgage at 2.4% = £200 per month
£30k income is about £2k per month. If the person is single they can pay down ~£1k a month and still have £800pm for other needs. If they are a couple potentially pay it down even faster.

A man on £30k and a woman on £25k can probably clear a £100k mortgage in 4 years if they wanted to.

westernpromise

kinger101 wrote: »

Unless you fix for the entire period of the mortgage, actual payments are not defined anywhere within your lending agreement.

This is true, although you can get 10-year fixes which are 40-odd per cent of the typical mortgage term. When I was a FTB in 1986 fixes of any kind were quite rare. IIRC they only started to become a thing about 4 or 5 years later when people realised mortgage rates could double within a year.

So we've now had 7.5 years of ultra low rates and you can fix for 10 more, which means 70% of the term is or has been at those rates. It will not be too long before we see someone who starts and then fixes a 25-year mortgage at 1% or so for the whole term. It is starting to look like the new normal.

Herzlos

cells wrote: »

A £100k mortgage at 2.4% = £200 per month
£30k income is about £2k per month. If the person is single they can pay down ~£1k a month and still have £800pm for other needs. If they are a couple potentially pay it down even faster.

A man on £30k and a woman on £25k can probably clear a £100k mortgage in 4 years if they wanted to.

Only if they don't spend any money anywhere else.

lisyloo

Only if they don't spend any money anywhere else.

So you're agreeing it's possible?
I would say like you that it's at the extreme end of how to live, but it does show what can be done.

michaels

cells wrote: »

With interest rates on 10% down purchases now closer to 2% the figures are still great. in most the country, the north, the midlands, wales, Scotland, NI its very affordable

A £100k 30-year REPAYMENT mortgage with 2% interest rates is only £370 a month. £100k mortgage plus a deposit will get you the local terrace in most parts of the country with a monthly bill in the region of social rents and you actually get a house at the end of it.

Ah - but 5 years as a social tenant and you get an 80k reduction in the price of the housing you are living in - even better than hpi in most cases