Sign of the times..?

setmefree2

Just to add a new twist:-

If I borrow £100, 000 @ 5% costs £175, 377 (£1.75377 * £100,000)

If the market falls and interest rates rise 1% I pay the same
£90,732 @ 6% costs £175,377 (£1.9329 * £90,732)

At a 2% rise in interest rates
£82,713 @ 7% costs £175,377 (£1.75377 * £82,713)

Either way the buyer pays £175, 377 per £100k. But as interest rates rise the seller gets less and the banks get more.

setmefree2

Fedupnow:- You could start a MFW diary, in which you showed your savings growing in order to POYM. This might help you alot as you would get alot of support from the other MFWers. Or there is also a thread on this board where people are saving up to buy a house outright, without a mortgage. Just a thought.;)

ailuro2

SMF2- you're right about the overall cost of a mortgage.

Thinking about it - there isn't really a situation where the bank AND the government lose out, is there?

If mortgage interest rates go up then we all pay more to the bank and house prices deflate on the back of this - in turn because of lower house prices the government gets less stamp duty on house sales, and less duty overall because people are less inclined to move.

If mortgage rates come down and house prices go back up the banks take in less interest but stamp duty goes back up again.

I don't care much whether higher interest rates mean more profit for the bank or not, they have a cost to borrow the money to lend to us too. They will make their profit somehow!

What never changes is that the little person in the suburbs trying to pay for a decent home for their family seems to lose out either way.

A few people have made money selling their homes for large amounts of money, but they still need to have somewhere to live too - there would be plenty of BTL landlords happy to take their money if they decided to rent- yet another set of people set to gain from the housing market being inflated.

setmefree2

ailuro2 wrote: »

I don't care much whether higher interest rates mean more profit for the bank or not, they have a cost to borrow the money to lend to us too. They will make their profit somehow!

Seems like it's not really the banks that are getting the money though but the fat cats who've already had their money and apparently are sunning themselves :rolleyes2- we have to plug the gap:rolleyes:...hate to think where it's all going to end...maybe that's too pessimistic (I hope)....It just makes me even more focused to POTM and get this monkey of my back:eek:

ailuro2

It will end up with more people able to afford a decent home for themselves, but sadly some people who bought when prices were high will have to sit it out to get out of negative equity situations.

That's what happened last time, anyway, and lo there will be a fresh generation who have had their fingers burnt by the housing market and will be cautious forever after.

Of course this might all be wind and waffle, the blip might be temporary, but somehow the pointers are that overpriced housing is never sustainable when salaries do not match.



What we're going to do with the nation's credit card debt is something else altogether, the country afaik has not seen levels of high cost debt like this before.

thank goodness for MSE, hopefully we're not going to be hurting too much if we've followed the common sense approach recommended throughout MSE.

gallygirl

ailuro2 wrote: »

SMF2- you're right about the overall cost of a mortgage.

Thinking about it - there isn't really a situation where the bank AND the government lose out, is there?

What never changes is that the little person in the suburbs trying to pay for a decent home for their family seems to lose out either way.
quote]

Apart from all our scenarios where we refuse to give the banks the 75k interest by paying off our mortgages :T .

Figures made really interesting reading, and I too had never thought about it like that before.

And as for the nations credit card debt :eek: :eek: :eek: :eek: :eek: - I really think credit control may be the only answer :eek: :eek: :eek: :eek: :eek: