Is it a good time to buy a house and fix the interest rate for as long as you can?

Crashy_Time

Say you had a 5% deposit just now, what would be some of the best rates you could get?

RelievedSheff

Crashy_Time said:

Say you had a 5% deposit just now, what would be some of the best rates you could get?

2.45%

https://moneyfacts.co.uk/mortgages/first-time-buyer-mortgages/95-ltv/

https://www.money.co.uk/mortgages/95-mortgages.htm

Mutton_Geoff

fewcloudy said:

Mutton_Geoff said:

For 277 years 1694-1971 with currency linked to holdings of precious metals (eg the "gold standard") - average rate 4.38%

For 49 years 1971-2020 after all links to gold standard removed - average rate 9.48%

It is widely written that an interest rate of +/-5% is about right for the general economy. It was that for nearly 300 years. The last decade or two has been completely skewed by printing presses with no regard to who is paying for the £20 notes.

Interesting... but it's that "last decade or two" (and the next decade or two) that's important to the house buyer today, not what was happening in the seventeen hundreds...

I don't agree. Sadly bubbles burst with little notice and take years to recover (if ever).

https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp

Nobody can predict the future and as with every financial product, "the past is no guarantee .." etc. What is important is that we need our houses as homes and what it is worth today/tomorrow/in 20 years shouldn't really come into the equation. I've just taken a 5 year interest only fix mortgage instead of paying it down for the simple reason it's very cheap money and I can do things with it over 5 years that are worth more to me than the 1.44% the bank is charging.

aoleks

RelievedSheff said:

Crashy_Time said:

Say you had a 5% deposit just now, what would be some of the best rates you could get?

2.45%

https://moneyfacts.co.uk/mortgages/first-time-buyer-mortgages/95-ltv/

https://www.money.co.uk/mortgages/95-mortgages.htm

or lower. rates go down by the week. you can now get a 95% mortgage at 2.39%... crazy, if you think about it.

Snookie12cat

Mutton_Geoff said:

fewcloudy said:

Mutton_Geoff said:

For 277 years 1694-1971 with currency linked to holdings of precious metals (eg the "gold standard") - average rate 4.38%

For 49 years 1971-2020 after all links to gold standard removed - average rate 9.48%

It is widely written that an interest rate of +/-5% is about right for the general economy. It was that for nearly 300 years. The last decade or two has been completely skewed by printing presses with no regard to who is paying for the £20 notes.

Interesting... but it's that "last decade or two" (and the next decade or two) that's important to the house buyer today, not what was happening in the seventeen hundreds...

I don't agree. Sadly bubbles burst with little notice and take years to recover (if ever).

https://www.investopedia.com/articles/stocks/10/5-steps-of-a-bubble.asp

Nobody can predict the future and as with every financial product, "the past is no guarantee .." etc. What is important is that we need our houses as homes and what it is worth today/tomorrow/in 20 years shouldn't really come into the equation. I've just taken a 5 year interest only fix mortgage instead of paying it down for the simple reason it's very cheap money and I can do things with it over 5 years that are worth more to me than the 1.44% the bank is charging.

100%. I am fixing on interest only and it's 1.12%. I like to have the money to do other things if wanted and can either downsize at the end or save the £150k over my lifetime and own it all. Lots of flexibility and like you, I prefer to have my money doing other things for me while the rates are this cheap.

lookstraightahead

aoleks said:

RelievedSheff said:

Crashy_Time said:

Say you had a 5% deposit just now, what would be some of the best rates you could get?

2.45%

https://moneyfacts.co.uk/mortgages/first-time-buyer-mortgages/95-ltv/

https://www.money.co.uk/mortgages/95-mortgages.htm

or lower. rates go down by the week. you can now get a 95% mortgage at 2.39%... crazy, if you think about it.

That is so crazy. As someone caught in the last crash, there are a lot of people who will take this out, get into more debt, have no equity or if they have they will remortgage, and be in a right mess.

but they will have a brand new Range Rover on tick and the latest colour in designer curtains 

aoleks

lookstraightahead said:

aoleks said:

RelievedSheff said:

Crashy_Time said:

Say you had a 5% deposit just now, what would be some of the best rates you could get?

2.45%

https://moneyfacts.co.uk/mortgages/first-time-buyer-mortgages/95-ltv/

https://www.money.co.uk/mortgages/95-mortgages.htm

or lower. rates go down by the week. you can now get a 95% mortgage at 2.39%... crazy, if you think about it.

That is so crazy. As someone caught in the last crash, there are a lot of people who will take this out, get into more debt, have no equity or if they have they will remortgage, and be in a right mess.

but they will have a brand new Range Rover on tick and the latest colour in designer curtains 

Not sure what a range rover has to do with the ability to buy a house with a 5% deposit, but yeah, stereotype much?

Crashy_Time

So true about the range rover, LOL.

lookstraightahead

aoleks said:

lookstraightahead said:

aoleks said:

RelievedSheff said:

Crashy_Time said:

Say you had a 5% deposit just now, what would be some of the best rates you could get?

2.45%

https://moneyfacts.co.uk/mortgages/first-time-buyer-mortgages/95-ltv/

https://www.money.co.uk/mortgages/95-mortgages.htm

or lower. rates go down by the week. you can now get a 95% mortgage at 2.39%... crazy, if you think about it.

That is so crazy. As someone caught in the last crash, there are a lot of people who will take this out, get into more debt, have no equity or if they have they will remortgage, and be in a right mess.

but they will have a brand new Range Rover on tick and the latest colour in designer curtains 

Not sure what a range rover has to do with the ability to buy a house with a 5% deposit, but yeah, stereotype much?

Are you asking me a question ? 

People over spend. All the time. A 5% deposit is nothing. If you can only save 5%, how on Earth are you going to finance a rise in interest rates and a possible correction in the housing market. 

I've yet to see a new housing estate with old cars. 

SpiderLegs

It’s amazing how some posters are almost in uproar about other people spending money when the cost of borrowing is so low.

Oh for the good old days when we had richer people creaming the interest on their savings and poorer people buying nothing or spending more of what little they had on financing costs.