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

lookstraightahead

SpiderLegs said:

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.

The cost of borrowing on a mortgage might be low at the moment. The cost of loans for other things is not. 

95% mortgages are dangerous, especially when interest rates are so low and the market is unstable. 

Ramouth

lookstraightahead said:

SpiderLegs said:

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.

The cost of borrowing on a mortgage might be low at the moment. The cost of loans for other things is not. 

95% mortgages are dangerous, especially when interest rates are so low and the market is unstable. 

I think it depends on your point of view.  For some a mortgage isn’t about paying it off ASAP and owning the whole house. It is about monthly living costs and a mortgage is often cheaper than rent.  The affordability checks are much more stringent than before the last big house price crash and long fixes give security.  Being in negative equity is only a problem if you need to move.

SpiderLegs

lookstraightahead said:

SpiderLegs said:

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.

The cost of borrowing on a mortgage might be low at the moment. The cost of loans for other things is not. 

95% mortgages are dangerous, especially when interest rates are so low and the market is unstable. 

In what way is the market unstable?
In what way are 95% mortgages more dangerous with low interest rates?

RelievedSheff

lookstraightahead said:

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. 

You have not looked very far then.

When we bought our new house I was still driving a 16 year old Nissan. Plenty on the estate here have older cars. We have a 1985 Sierra in the garage.

Im not sure why the age of a car influences where you live?

RelievedSheff

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 

We bought a house at the peak just before the last crash. We took out a 105% mortgage on a property which very quickly left us in negative equity and unable to remortgage to cheaper rates when our fixed rate ran out. It wasn't the huge disaster some seem to think it should be. We just kept paying the mortgage (which was cheaper than rent in the local area) and eventually house prices recovered and our mortgage repayments continued and we had equity in the property again.

I wish our rate had been 2.39% then. At the time is was closer to 5%.

Getting_greyer

Ramouth said:

lookstraightahead said:

SpiderLegs said:

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.

The cost of borrowing on a mortgage might be low at the moment. The cost of loans for other things is not. 

95% mortgages are dangerous, especially when interest rates are so low and the market is unstable. 

I think it depends on your point of view.  For some a mortgage isn’t about paying it off ASAP and owning the whole house. It is about monthly living costs and a mortgage is often cheaper than rent.  The affordability checks are much more stringent than before the last big house price crash and long fixes give security.  Being in negative equity is only a problem if you need to move.

Absolutely agree regarding monthly costs.  If a potential mortgage payment increased from £600 to £700 a month, a renter paying £900 would jump at the chance. 

lookstraightahead

Ramouth said:

lookstraightahead said:

SpiderLegs said:

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.

The cost of borrowing on a mortgage might be low at the moment. The cost of loans for other things is not. 

95% mortgages are dangerous, especially when interest rates are so low and the market is unstable. 

I think it depends on your point of view.  For some a mortgage isn’t about paying it off ASAP and owning the whole house. It is about monthly living costs and a mortgage is often cheaper than rent.  The affordability checks are much more stringent than before the last big house price crash and long fixes give security.  Being in negative equity is only a problem if you need to move.

I don't disagree that it's about your lifestyle and whether you think you will stay in your property for a long time, and then you can maybe weather the storms. 

Personally, life events meant that owning fir me was either a noose round my neck, or a chain round my ankles for a lot of the time.

I'm satisfied that I'm in no rush to move again (small mortgage, old house that needs tlc, more flexible work) but I am in my fifties now.

My parents in law stayed in the same house for the whole of their married life - over 60 years. Same jobs, same town. Can't see many people wanting to do that nowadays. 

Long fixes do help, but affordability checks don't really mean much. No one tells their lender they're thinking of starting a family, buying a new car, going on expensive holidays as soon as they get their mortgage sorted. They then build up debt, interest rates start to creep up once they can't refix because they're circumstances change, possibility of market changing etc. Then add a break up (how many divorces are there now - over a third of the population?). 

All I'm really saying is that sometimes buying a house isn't the right option.

SpiderLegs

lookstraightahead said:

…

Long fixes do help, but affordability checks don't really mean much. No one tells their lender they're thinking of starting a family, buying a new car, going on expensive holidays as soon as they get their mortgage sorted. They then build up debt, interest rates start to creep up once they can't refix because they're circumstances change, possibility of market changing etc. Then add a break up (how many divorces are there now - over a third of the population?). 

All I'm really saying is that sometimes buying a house isn't the right option.

Equally no-one tells their lender how they expect their career and earnings to develop.

Personally speaking my salary is somewhere around 3.5 times what is what when I took out my first mortgage. However, since my single example is not that useful we should instead consider whether your doom and gloom is borne out by widespread misery of homeowners over the last thirty or so years.

the answer is no it isn't.

lookstraightahead

SpiderLegs said:

lookstraightahead said:

…

Long fixes do help, but affordability checks don't really mean much. No one tells their lender they're thinking of starting a family, buying a new car, going on expensive holidays as soon as they get their mortgage sorted. They then build up debt, interest rates start to creep up once they can't refix because they're circumstances change, possibility of market changing etc. Then add a break up (how many divorces are there now - over a third of the population?). 

All I'm really saying is that sometimes buying a house isn't the right option.

Equally no-one tells their lender how they expect their career and earnings to develop.

Personally speaking my salary is somewhere around 3.5 times what is what when I took out my first mortgage. However, since my single example is not that useful we should instead consider whether your doom and gloom is borne out by widespread misery of homeowners over the last thirty or so years.

the answer is no it isn't.

No, I'm just saying they're more to life than owning a property. 

Crashy_Time

SpiderLegs said:

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.

And the cost of property is so high, with really only one direction for the cost of borrowing to go? Obviously the more switched on posters can see the potential pitfalls.