Fixed rate mortgages below 2% axed from the market as interest rates continue to rise

nicknameless

Thrugelmir said:

nicknameless said:

Thrugelmir said:

nicknameless said:

Thrugelmir said:

nicknameless said:

Richiem1987 said:

AFF8879 said:

I’m currently fixed until late 2026, guess we all now need to overpay as much as possible until our fixes end! As it seems rates are only headed in one direction.

Is the correct course of action. 

Err no - not for most.  Overpay low interest debt which is inflating away?  Not on your nelly.

Low interest debt for how long?  Perhaps global markets will tank. Then a double whammy. Leveraging has always been a double edged sword. Magnifies both gains and losses. 

It would have to be a pretty stupendous tank to negate gains from the recent bull market.  Past returns are no indication and all that and investing not for everyone.  Was just pointing out that this (often) received wisdom is nothing such.

Cash is king. Numbers on a piece of paper or a screen mean very little. When stock markets become detached from financial reality, i.e. the trading performance of the actual companies invested in. Then one knows that it's only a matter of time. History repeats itself over and over. Hence why the four most expensive words in the English llanguage are said to be the quote "This Time is Different". 

Regardless, you missed my point entirely.  Sticking spare money in the mortgage at such low rates is not the most financially productive approach.

Wrong forum, wrong discussion.

I probably invested in my first private equity investment before you were even born. Little point in trying to teach me to suck eggs. 

and little point you being patronising (wink, wink).  you were still talking twaddle.

steampowered

theartfullodger said:

In November 1979 under Thatcher's government BoE base rate hit 17%.

I had a for then large mortgage. Was "lucky" as building society only demanded 15%...

Good luck you young folk...Could get much worse

What you are failing to mention is that inflation devalued the principal on your debt.

You were effectively paying off 17% of your mortgage each year, for free. 

Thrugelmir

lookstraightahead said:

This should be of no surprise to anyone. No one should get into any type of trouble as the banks 'stringent affordability checks' are watertight (😏🙄). 

Onus is placed on the banks to factor in affordability by the regulator. How people choose to spend their disposable income is up to them. When the squeeze hits won't be the mortgage lenders that suffer a downturn in trade. 

Silvertabby

lookstraightahead said:

This should be of no surprise to anyone. No one should get into any type of trouble as the banks 'stringent affordability checks' are watertight (😏🙄). 

When we took out our mortgage in the mid 90s our offered rate was over 7%.  We asked how much our monthly payments would be if rates went up to, say, 12% and the advisor nearly laughed himself out of his chair and said that would never happen.

We reminded him that rates had been way more than 12% just a few short years earlier and insisted on the figures.

When we said that we could still manage at 12% he tried to sell us a bigger mortgage....

jonnydeppiwish!

they kind of are. I'm imagining if people were to get in trouble, they'd have quite a few buffers...

phone contract, nespresso subscription, amazon prime, netflix, crypto, waitrose etc.

plenty of stuff that can be cut before people decide not to pay their mortgage. and what's the alternative, anyway? living in a shared house that costs more than your mortgage? the street? get real.

This. So many people moaning about how they can’t save or afford to buy a house.

My sister has cut out all of these things in the last few months as she’s worried about the energy prices. She’s saving almost £400 pm and is still shopping at Waitrose (albeit for mainly for the reduced item for when we go over for tea!).

Sarah1Mitty2

Thrugelmir said:

lookstraightahead said:

This should be of no surprise to anyone. No one should get into any type of trouble as the banks 'stringent affordability checks' are watertight (😏🙄). 

Onus is placed on the banks to factor in affordability by the regulator. How people choose to spend their disposable income is up to them. When the squeeze hits won't be the mortgage lenders that suffer a downturn in trade. 

People have been saying that the squeeze is coming for years, but I thought lending tended to drop during recessions, or is that incorrect?

Thrugelmir

Sarah1Mitty2 said:

Thrugelmir said:

lookstraightahead said:

This should be of no surprise to anyone. No one should get into any type of trouble as the banks 'stringent affordability checks' are watertight (😏🙄). 

Onus is placed on the banks to factor in affordability by the regulator. How people choose to spend their disposable income is up to them. When the squeeze hits won't be the mortgage lenders that suffer a downturn in trade. 

People have been saying that the squeeze is coming for years, but I thought lending tended to drop during recessions, or is that incorrect?

Lending is already tailing away. Doesn't require a recession for consumers to sit on their hands. Inflation is the real problem currently. 

Sarah1Mitty2

Thrugelmir said:

Sarah1Mitty2 said:

Thrugelmir said:

lookstraightahead said:

This should be of no surprise to anyone. No one should get into any type of trouble as the banks 'stringent affordability checks' are watertight (😏🙄). 

Onus is placed on the banks to factor in affordability by the regulator. How people choose to spend their disposable income is up to them. When the squeeze hits won't be the mortgage lenders that suffer a downturn in trade. 

People have been saying that the squeeze is coming for years, but I thought lending tended to drop during recessions, or is that incorrect?

Lending is already tailing away. Doesn't require a recession for consumers to sit on their hands. Inflation is the real problem currently. 

If it is doesn`t that mean that mortgage lenders won`t do so well, I would have thought that they did better in the good times and any squeeze would affect them?

Thrugelmir

Sarah1Mitty2 said:

Thrugelmir said:

Sarah1Mitty2 said:

Thrugelmir said:

lookstraightahead said:

This should be of no surprise to anyone. No one should get into any type of trouble as the banks 'stringent affordability checks' are watertight (😏🙄). 

Onus is placed on the banks to factor in affordability by the regulator. How people choose to spend their disposable income is up to them. When the squeeze hits won't be the mortgage lenders that suffer a downturn in trade. 

People have been saying that the squeeze is coming for years, but I thought lending tended to drop during recessions, or is that incorrect?

Lending is already tailing away. Doesn't require a recession for consumers to sit on their hands. Inflation is the real problem currently. 

If it is doesn`t that mean that mortgage lenders won`t do so well, I would have thought that they did better in the good times and any squeeze would affect them?

Lenders have the ability to widen their margins. With more business now driven through mortgage brokers. Lenders have changed their business models and reduced their fixed cost base. 

Lavendyr

theartfullodger said:

In November 1979 under Thatcher's government BoE base rate hit 17%.

I had a for then large mortgage. Was "lucky" as building society only demanded 15%...

Good luck you young folk...Could get much worse

Artful, seriously, I usually think you are awfully sensible especially on the renting threads but this is a bit of a surprise. Interest rates then were horrific but house prices were far, far less so in terms of income ratio. My sister purchased her first (2 bed) house in 1995 at 2x her salary - and that was with her partner. My dad purchased his 3 bed house after divorce in 1997 at just over 1x his salary. Both in decent areas in the "home counties".

Let's try and be constructive rather than condescending, shall we?