why are mortgages so cheap
Discussion
PoleDriver said:
PFFfft! You youngsters don't know you're born! I saw someone compalining about a 6% mortgage being high!
The last time I had a mortgage I was paying 18%... And I got a good deal!!
I agree,when I started my business I doubled the mortgage on my home, paying a very good 15%!! I wish interest rates would go up on my savings.After working all your life paying off the mortgage and paying tax anything left over earns 3% if your lucky and then you pay 20% tax on it.The last time I had a mortgage I was paying 18%... And I got a good deal!!
rovermorris999 said:
I'm sooo glad I was lucky enough to get a 1% over base (so 1.5% now) flexible mortgage from first direct about 10 years ago. Sheer luck though, no cleverness unfortunately.
That's a cracking rate. Dutch domestic mortgages are typically EUR swap rate + liquidity spread of >1% ( bank needs to borrow short-term what it lends to you for 30yrs) + credit risk and interest margin of say 1%Old Merc said:
I agree,when I started my business I doubled the mortgage on my home, paying a very good 15%!! I wish interest rates would go up on my savings.After working all your life paying off the mortgage and paying tax anything left over earns 3% if your lucky and then you pay 20% tax on it.
If interest rates went back to 15% house prices would drop through the floor and your house would be worth what it was worth when you started the business. So you are getting the benefit there rather than in your savings.My parents bought their house in the mid eighties (interest rates were 10%?) for £45k and its now worth somewhere north of £350k. Lots of that is down to regional regeneration and their extension I accept.
Feel sorry for us children of baby boomers who have to pay inflated prices and also get no return on savings. Oh and there's no more gold plated pensions out there either. Boo hoo.....
Edited by was8v on Tuesday 23 August 21:21
IN 1990 my mortgage was just £150 less than my take home due to a rate of 15.5%. Which delayed having children for a while, but eventually I fixed my mortgage for 10 years about 8 years ago, at 4.66 %, which was a mistake, as not doing so would have been cheaper, except that I overpaid the maximum each month I could without having to pay penalties for a couple of years, and am now paying just £12.64 a month (which works out cheaper than paying off the full amount and paying their admin fee. Plus they are looking after the deeds for free, which once paid off they'd like to charge for. Now I can live on half my take home.
My point? Whatever you do, just pay the fecker off as soon as you can.
My point? Whatever you do, just pay the fecker off as soon as you can.
Mr POD said:
IN 1990 my mortgage was just £150 less than my take home due to a rate of 15.5%. Which delayed having children for a while, but eventually I fixed my mortgage for 10 years about 8 years ago, at 4.66 %, which was a mistake, as not doing so would have been cheaper, except that I overpaid the maximum each month I could without having to pay penalties for a couple of years, and am now paying just £12.64 a month (which works out cheaper than paying off the full amount and paying their admin fee. Plus they are looking after the deeds for free, which once paid off they'd like to charge for. Now I can live on half my take home.
My point? Whatever you do, just pay the fecker off as soon as you can.
I think the point may be that in 1990 £150 was a liveable sum of money. I wonder how many people are on a similar limit at 4% today?My point? Whatever you do, just pay the fecker off as soon as you can.
Mortgages in the UK are historically the cheapest in the World (when compared to the underlying cost of funding). You only have to look at the (often latent) arrears that banks (in particular) are carrying on their balance sheets to see how under-priced the risks have been in the past. Whilst it is very fashionable to cane banks for everything they have done, over the last 20 years they have, unwittingly, but effectively shovelled money to anyone who has had a mortgage.
The current mortgage market better reflects the economic realities of lending with property as security, but I don't think it yet fully reflects the true risks that our financial institutions have been running over the years, and continue to run lending against property. [awaits flaming]
The current mortgage market better reflects the economic realities of lending with property as security, but I don't think it yet fully reflects the true risks that our financial institutions have been running over the years, and continue to run lending against property. [awaits flaming]
Rocksteadyeddie said:
Mortgages in the UK are historically the cheapest in the World (when compared to the underlying cost of funding). You only have to look at the (often latent) arrears that banks (in particular) are carrying on their balance sheets to see how under-priced the risks have been in the past. Whilst it is very fashionable to cane banks for everything they have done, over the last 20 years they have, unwittingly, but effectively shovelled money to anyone who has had a mortgage.
The current mortgage market better reflects the economic realities of lending with property as security, but I don't think it yet fully reflects the true risks that our financial institutions have been running over the years, and continue to run lending against property. [awaits flaming]
True enough, mortgage lending is too restricted at the moment.The current mortgage market better reflects the economic realities of lending with property as security, but I don't think it yet fully reflects the true risks that our financial institutions have been running over the years, and continue to run lending against property. [awaits flaming]
Can I borrow your fireproof kit?
I think part of the problem is the Mortgage Advisors and Estate Agents who are still trying to push people too far
We've just bought for 180k but could have obtained a mortgage for 250k, I say could have as technically we qualify due to our earnings, of course we looked at the figures and realised that each month would be quite tight, so chose a figure that worked for us and went shopping
On a number of occasions we were encouraged to think about spending/borrowing more, if you qualify on the rules that the banks lay out it's not the banks fault if you are to retarded to think for yourself whether you can afford it or if you bow to the pressure from Estate Agents and Mortgage Advisors
We've just bought for 180k but could have obtained a mortgage for 250k, I say could have as technically we qualify due to our earnings, of course we looked at the figures and realised that each month would be quite tight, so chose a figure that worked for us and went shopping
On a number of occasions we were encouraged to think about spending/borrowing more, if you qualify on the rules that the banks lay out it's not the banks fault if you are to retarded to think for yourself whether you can afford it or if you bow to the pressure from Estate Agents and Mortgage Advisors
mcbook said:
Don't take this the wrong way but isn't one of the reasons the housing market got so out of control because banks were offering people like you 100% mortgages. If you can't afford it, save up some cash until you can.
We can afford the mortgage repayments (hell, i can afford them on my own), just not the 10% deposit. Hudson said:
Me and the O/H would love to mortgage our own place, but not being able to pull £12000+ out of my rectum we're forced to rent.
I keep seeing statements like this.I know that general living costs a lot, but a couple on even below average salaries could save up £12k in less than 2 years.
Indeed!oyster said:
Hudson said:
Me and the O/H would love to mortgage our own place, but not being able to pull £12000+ out of my rectum we're forced to rent.
I keep seeing statements like this.I know that general living costs a lot, but a couple on even below average salaries could save up £12k in less than 2 years.
Dave
oyster said:
Hudson said:
Me and the O/H would love to mortgage our own place, but not being able to pull £12000+ out of my rectum we're forced to rent.
I keep seeing statements like this.I know that general living costs a lot, but a couple on even below average salaries could save up £12k in less than 2 years.
That would mean no pissing ££££ up the wall, no eating out, no I Phones etc etc.Priorities.
jonah35 said:
you can get near to paying 2.99% with a 25% deposit - that's quiet low really, Makes you wonder what the point is in saving doesn't it!
A 25% deposit eh... 
that means round here I need to somehow get hold of £87500 cash and then I can get that mortgage.
What I'm saying is, if you work and live in London, being a first time buyer is not fun. The only people I know of who have managed if have had the money stumped up by their parents.
BMWBen said:
jonah35 said:
you can get near to paying 2.99% with a 25% deposit - that's quiet low really, Makes you wonder what the point is in saving doesn't it!
A 25% deposit eh... that means round here I need to somehow get hold of £87500 cash and then I can get that mortgage.What I'm saying is, if you work and live in London, being a first time buyer is not fun. The only people I know of who have managed if have had the money stumped up by their parents.
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