MSE News: Mortgages tumble below 2%... if you've got the deposit
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Funding for Lending is finally filtering through, but god knows how much is side tracked into propping up capital reserves first.
The whole process is about re-inflating the property bubble through cheap money, using a LEAKY HOSE!
1. Stop diluting my money by printing more money.
2. The banks are lending the money we give them at 5% to First Time Buyers.
3. The £2,499 type arrangement fees means "Don't buy this product, dumb dumb. We would rather lend at 5% to FTBs."
It's like charities these days. The "charity workers" are simply employees paid a salary, sometimes on commission. Directors get salaries of £100k or so. The aid gets through by bribing local militias and warlords. Fiinally, after you distribute the aid, gunmen come and shoot the starving and take it away to feed the war effort.
Just guarantee the loans for FTBs, so they can get low rates, which will stop the profiteering.0 -
This may be a stupid question but I'm going to ask it anyway as it's something I've wondered about, how much do the fees affect how good the deal is? As in, how low does the percentage have to go to be worth spending more on the fees as the article mentions thousands in fees.
I am a first time buyer and I've saved up a large deposit as any time I've been researching mortgages it seemed the way to go to get the best rates and ultimately save a fairly significant chunk of money in the long run, it does mean cutting back on my outgoings rather than being rich (unfortunately!). I can't quite get my head round paying a largish fee for just a couple of years fixed rate.
John
I work out the over all cost of the mortgage over the deal period. So if you have a 5 year fix at 2.99% and it's going to cost £474 per month but the fee is £1995 then multiply £474 by 60 and add the £1995 to get the overall cost. Do the same with higher rates and smaller fees to compare. In this case paying a higher rate with a lower fee works out cheaper.0 -
Sorry, what is "rich"?? I am an FTB, 39 yo, finally on a good salary with small amount of savings, no debt, but likewise no credit, and yet I have been refused anything more than a 65% mortgage. With average property prices within a 50 mile radius of where I live (currently having to pay >£1k per mth in rent on a fairly crummy flat) being at least £150k (and too small for my family anyway) that means this 'apparently rich' person has to stump up over £50k in just a deposit.
Who has that kind of earning-to-saving power these days???
I object to the blanket response that earning over a certain level, which incidentally means I can't participate in something like first buy makes a person 'rich'. The simple fact is I can't afford to buy and never will, no matter that I now earn a good salary. It isn't just low earners that suffer!0 -
I'm a FTB with 55% deposit....
it's just a really cheap house!0 -
Sorry, what is "rich"?? I am an FTB, 39 yo, finally on a good salary with small amount of savings, no debt, but likewise no credit, and yet I have been refused anything more than a 65% mortgage. With average property prices within a 50 mile radius of where I live (currently having to pay >£1k per mth in rent on a fairly crummy flat) being at least £150k (and too small for my family anyway) that means this 'apparently rich' person has to stump up over £50k in just a deposit.
Who has that kind of earning-to-saving power these days???
I object to the blanket response that earning over a certain level, which incidentally means I can't participate in something like first buy makes a person 'rich'. The simple fact is I can't afford to buy and never will, no matter that I now earn a good salary. It isn't just low earners that suffer!
I hear you. Its a really tough position to be in. Wow where do you live? £700 would get you a 3 bed semi to rent around here.“Nobody ever defended anything successfully, there is only attack and attack and attack some more.”
SAF...ok G. Patton
"If a man does his best, what else is there?"
G. Patton0 -
I modify that slightly by considering the overall cost of finance for the period of the deal..I work out the over all cost of the mortgage over the deal period. So if you have a 5 year fix at 2.99% and it's going to cost £474 per month but the fee is £1995 then multiply £474 by 60 and add the £1995 to get the overall cost. Do the same with higher rates and smaller fees to compare. In this case paying a higher rate with a lower fee works out cheaper.
So, if you borrow £100,000 for 2 years fixed at 2% pa with a £1,000 fee, the interest charge is approx. £100,000 x 2% x 2 years = £4,000 + £1,000 fee = £5,000 total cost of finance over the two year period. This method takes into account the capital paid off the mortgage during the two-year period.
It's difficult to compare deals over different periods because you don't know in advance what new deal you might get when the earlier one expires. Hope that makes sense.
Warning: In the kingdom of the blind, the one-eyed man is king.
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Consumerist wrote: »I modify that slightly by considering the overall cost of finance for the period of the deal..
So, if you borrow £100,000 for 2 years fixed at 2% pa with a £1,000 fee, the interest charge is approx. £100,000 x 2% x 2 years = £4,000 + £1,000 fee = £5,000 total cost of finance over the two year period. This method takes into account the capital paid off the mortgage during the two-year period.
It's difficult to compare deals over different periods because you don't know in advance what new deal you might get when the earlier one expires. Hope that makes sense.
Thats exactly the same as mine but a slightly different way of getting the same answer. You're right the fixed rate has to be the same length and it's assuming you can remortgage to another deal after the period ends. If someone has a low deposit I would take into account the SVR too as stricter lending criteria or falling house prices could mean your stuck on that SVR. Although SVRs can and do change!!0 -
The calculated interest is compound not simple isn't it, and calculated on a daily basis? Are you just using that method as rough and ready indication?“Nobody ever defended anything successfully, there is only attack and attack and attack some more.”
SAF...ok G. Patton
"If a man does his best, what else is there?"
G. Patton0 -
Quite right. It's just a rough-and-ready method to make comparisons. Any accurate method becomes a little complex. Over the short periods of mortgage deals it should be close enough for practical purposes.The calculated interest is compound not simple isn't it, and calculated on a daily basis? Are you just using that method as rough and ready indication?Warning: In the kingdom of the blind, the one-eyed man is king.
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