50 year mortgage term?

Shankers

How likely do you think it is that 50 year mortgages will be given the greenlight in the UK?
https://news.sky.com/story/government-considering-50-year-mortgages-that-could-pass-down-generations-to-tackle-housing-crisis-12644368
My own view is that it would be a bad idea as I can only see it pushing housing prices up, meaning it'll still be hard for people to get on the housing ladder.

If you think it'll happen, when do you think it might happen?

Am I wrong in thinking it would push house prices up?

ACG

The only thing that brings house prices down is a recession/mass redundancies and/or building more of them. 
This whole 50 year term/intergenerational mortgage thing makes it more affordable for more people - which in turn increases the prices. 

Its a silly idea and I am not sure how it works in practice. You would like to think the government had got lenders onboard and not just come up with some daft idea that has no backers - but its a government so who knows. 

MWT

50, even 60 year mortgages have been a thing in the USA for a while, typically fixed rate..

Doesn't mean they are a good thing though...

MalMonroe

I think it's awful and hope it doesn't take off here. I remember the day I was arranging to take out a 30 year mortgage. I felt physically ill. I needn't have worried though because I separated from the person I arranged the mortgage with and we sold the property and split the proceeds. Had it been for fifty years I don't think I'd have gone through with it.

Maybe it wasn't the thought of the thirty years that made me feel ill but the thought of having a relationship lasting that long. We will never know. 

Generally, I don't like it.

MWT

In some respects, a 50 year mortgage is the closest thing to 'interest-only' that a typical borrow can get these days.

There should be no serious intent to actually stick with it for 50 years, but it does let people get into the market at a monthly cost that is at least bearable, but it comes with a lot of risks if the market does a nose-dive, or if your promising career with lots of pay rises turns out not to happen...

Shankers

Thanks all. 

Personally, I really hope it doesn't happen as we're saving for a deposit to purchase late 2023/early-mid 2024. We don't want house prices being pushed up even further in the meantime.

Would the government need to pass law to allow 50 year mortgages, or could they simply meet with lenders and encourage the idea? If it's the former, it would take longer to become a reality than the latter, I'd imagine. 

Coffeekup

MalMonroe said:

I think it's awful and hope it doesn't take off here.

I agree with you.

MWT said:

50, even 60 year mortgages have been a thing in the USA for a while, typically fixed rate..

Doesn't mean they are good thing though...

These day's everything I see is influenced by America, from retail parks to the advertisements on TV.

Shankers said:

How likely do you think it is that 50 year mortgages will be given the greenlight in the UK?
For me I'd say almost certain.

If you think it'll happen, when do you think it might happen?
Soon.. within the next 5 year's..

Am I wrong in thinking it would push house prices up?
I'd say yes but I'm far from an expert 

Dandytf

Shankers said:

Thanks all. 

Personally, I really hope it doesn't happen.

Would the government need to pass law to allow 50 year mortgages, or could they simply meet with lenders and encourage the idea? If it's the former, it would take longer to become a reality than the latter, I'd imagine. 

I honestly hope not, a lot could happen across such a long term.

MobileSaver

Shankers said:

I can only see it pushing housing prices up, meaning it'll still be hard for people to get on the housing ladder.

Swings and roundabouts. It would push prices up but at the same time for a lot of people it would ironically make houses more affordable and thus easier to get on the housing ladder.

ACG

MobileSaver said:

Shankers said:

I can only see it pushing housing prices up, meaning it'll still be hard for people to get on the housing ladder.

Swings and roundabouts. It would push prices up but at the same time for a lot of people it would ironically make houses more affordable and thus easier to get on the housing ladder.

It would make them more affordable for a short period. Then people make higher offers because they can afford the higher repayments and so it just becomes a short term fix. 

ACG

MalMonroe said:

I think it's awful and hope it doesn't take off here. I remember the day I was arranging to take out a 30 year mortgage. I felt physically ill. I needn't have worried though because I separated from the person I arranged the mortgage with and we sold the property and split the proceeds. Had it been for fifty years I don't think I'd have gone through with it.

Maybe it wasn't the thought of the thirty years that made me feel ill but the thought of having a relationship lasting that long. We will never know. 

Generally, I don't like it.

If it makes you feel any better, my first mortgage was for 25 years and I felt a bit like **** I have just secured a massive big debt woop! But then I realised it cost about half what rent was costing and it was mine.