birch-chorley Posted January 13, 2017 Share Posted January 13, 2017 Mortgages have always confused me, I remember about 15 years ago, we decided to fix our mortgage rate for 5 years, but interest rates plummeted and we were miles worse off. I guess its pot luck though, if I was looking at a fixed rate, I certainly wouldn't go longer than a 2 year fixed. I've been looking online to see if I can get a better deal than our current one, I think ours is just a bog standard rate with Lloyds (C&G) we have a mortgage of 90K currently and we're paying £409.00 a month, which seems pretty good, I can't get much better, so may as well stay put. I understand the point your making but I suppose the counter argument would be that rates have been fuck all for a decade, it only leaves it going 1 way and that's up It's certainly unlikely that you would lock in a fixed rate for 5 / 10 years then rates go even lower in that time, that would mean negative interest rates, I just can't see it Quote Link to comment Share on other sites More sharing options...
Site Supporter Winchester White Posted January 13, 2017 Author Site Supporter Share Posted January 13, 2017 (edited) It was the first thing I did when I retired. The money it cost me would never have made what I've saved in interest by no longer having a mortgage. If you can afford it, get it paid off. Things are truely out of the norm at the moment, not sure we can look on past events with any kind of assurance to today. Borrowing rate's are not going to stay let like they are now, ithe is a case of how long until they rise Edited January 13, 2017 by Winchester White Quote Link to comment Share on other sites More sharing options...
birch-chorley Posted January 13, 2017 Share Posted January 13, 2017 The whole paying the mortgage off piece, I guess it's the way your wired up My old fella has had a tracker with HSBC for nearly ten years (post crash) at 0.5% above base - it's basically free money at that - he's been bending over backwards to over pay and get it cleared. I told him to invest his overpayments in long term stock options instead as they only need to return more than 1% growth to make you more money than paying the mortgage down The FTSE 100 has doubled since then I was also told an anecdote which I quite like. When the iPod was first released if you had bought shares to the value of 1 iPod ($300 say) instead of the device those shares would now be worth over $40,000 Picking the next apple is obviously not as easy without hindsight, it backs up the theory though I'm thinking Tesla would be a strong long term bet to return more than your mortgage rate Quote Link to comment Share on other sites More sharing options...
Blondi Posted January 13, 2017 Share Posted January 13, 2017 I understand the point your making but I suppose the counter argument would be that rates have been fuck all for a decade, it only leaves it going 1 way and that's up It's certainly unlikely that you would lock in a fixed rate for 5 / 10 years then rates go even lower in that time, that would mean negative interest rates, I just can't see it It depends on what rate you're borrowing at. Quote Link to comment Share on other sites More sharing options...
Big E Posted January 13, 2017 Share Posted January 13, 2017 FA know nothing and you pay for their advice. The FTSE is at a record high and nobody, but nobody saw it coming - 12 days of rises. Interest rates can only rise, how soon who knows? Pretty sure FA's do know what they are doing. There is a whole industry built around it Quote Link to comment Share on other sites More sharing options...
birch-chorley Posted January 13, 2017 Share Posted January 13, 2017 It depends on what rate you're borrowing at. You cal lock in for 10 years at 3%, was as low as 2.5% with Coventry Building society in September I bet you can get 5 year fixes around the 2% mark I could understand if you locked in at 6% and rates dropped but at the prices they are currently giving away there is little or no risk of that happening Quote Link to comment Share on other sites More sharing options...
ZiggyStardust Posted January 13, 2017 Share Posted January 13, 2017 I was also told an anecdote which I quite like. When the iPod was first released if you had bought shares to the value of 1 iPod ($300 say) instead of the device those shares would now be worth over $40,000 Picking the next apple is obviously not as easy without hindsight, it backs up the theory though I'm thinking Tesla would be a strong long term bet to return more than your mortgage rate Ron Wayne. Original shareholder in apple. Sold his 10% share for $800 in 1976. That share would now be worth $60 billion. Quote Link to comment Share on other sites More sharing options...
Jol_BWFC Posted January 13, 2017 Share Posted January 13, 2017 I understand the point your making but I suppose the counter argument would be that rates have been fuck all for a decade, it only leaves it going 1 way and that's up It's certainly unlikely that you would lock in a fixed rate for 5 / 10 years then rates go even lower in that time, that would mean negative interest rates, I just can't see it Agree. Just depends how long it takes to go up. If you went for a 2-year fixed now and refinanced onto a 3-year fixes in two years' time, the rates over the five years could be lower than taking a 5-year fixed now. That assumes rates don't go up much in the next couple of years though. If they do go up, the 5-year could be better overall. I don't think the Bank of England knows when they'll change the rates, and how quickly. So no idea how the likes of us are expected to know which is best. Quote Link to comment Share on other sites More sharing options...
birch-chorley Posted January 13, 2017 Share Posted January 13, 2017 Bank of England base rates are only 1 piece of the pie anyway It's up to the market and the banks to decide what margins they want to make They have all increased the rates on the long term fixed rates over the past few months. That means they are either predicting the next ten years to have higher rates than they expected 3 months ago or alternatively they just want to make more money Or a bit of both Quote Link to comment Share on other sites More sharing options...
Moderators Casino Posted January 13, 2017 Moderators Share Posted January 13, 2017 If you can afford the payments, I'd lock in as long as possible as rates are now But maybe that's cos I'm not a fan of little surprises Quote Link to comment Share on other sites More sharing options...
Moderators Zico Posted January 13, 2017 Moderators Share Posted January 13, 2017 Mortgages have always confused me, I remember about 15 years ago, we decided to fix our mortgage rate for 5 years, but interest rates plummeted and we were miles worse off. Aye Bought in 2006 Fixed ran out in 2008 Same time I switched jobs and took 5k pay cut Advisor said stay on variable but panicked and went with fixed for another 3 Turns out I should have stayed on variable Quote Link to comment Share on other sites More sharing options...
bgoefc Posted January 13, 2017 Share Posted January 13, 2017 (edited) When we moved into our current house 27 years ago, interest rates were 12% and jumped to 15% whithin 6 months! I remember that well. We were 3 years into our mortgage and the interest rate had doubled. Only saved by the fact my new boss was giving me pay rises every 6 months. Edited January 13, 2017 by bgoefc Quote Link to comment Share on other sites More sharing options...
Boby Brno Posted January 14, 2017 Share Posted January 14, 2017 I remember that well. We were 3 years into our mortgage and the interest rate had doubled. Only saved by the fact my new boss was giving me pay rises every 6 months.They were tough times. We immediately went into negative equity and it took years to recover. Of course we were the generation that had it easy if you believe some. Quote Link to comment Share on other sites More sharing options...
birch-chorley Posted January 14, 2017 Share Posted January 14, 2017 I'd imagine it's swings and roundabouts A mates Mum and Dad bought a great property in Croston for peanuts back in the 70's and it's now worth close to a million Whilst house prices are ridiculous at the moment (in proportion to average incomes) the super low interest rates mean you claw it back over the life of the mortgage Back in the 70's & 80's the purchase price would have been more reasonable (compared to average income) but then you get clobbered over the life of the mortgage with higher interest rates I'd bet there is very little in the comparison over the life of a mortgage vs average household income Quote Link to comment Share on other sites More sharing options...
Salford Trotter Posted January 14, 2017 Share Posted January 14, 2017 We bought our first house, a 3 bed sunshine semi, in '88 for £32k which was a stretch at the time but unlike today everyone could get on the housing ladder. I do fear for the next generation buying a property if they haven't got wealthy parents who can help with a deposit. Quote Link to comment Share on other sites More sharing options...
Moderators Zico Posted January 14, 2017 Moderators Share Posted January 14, 2017 They were tough times. We immediately went into negative equity and it took years to recover. Of course we were the generation that had it easy if you believe some. I do find it hard to imagine interest rates were so high or more to the point what would happen if they got that high again On the other hand I would think anyone paying a mortgage in the 90s has a house thats probably doubled if not tripled in value since then Quote Link to comment Share on other sites More sharing options...
Salford Trotter Posted January 14, 2017 Share Posted January 14, 2017 I do find it hard to imagine interest rates were so high or more to the point what would happen if they got that high again On the other hand I would think anyone paying a mortgage in the 90s has a house thats probably doubled if not tripled in value since then Typically house prices double every 10 years, not in every case mind Quote Link to comment Share on other sites More sharing options...
Moderators Zico Posted January 14, 2017 Moderators Share Posted January 14, 2017 (edited) Typically house prices double every 10 years, not in every case mindBought mine 10 years ago When I got my last deal sorted 2 years ago had it valued 3 times One was 15k under, one was the same, one was 15k over! New deal required this year so will be interesting to see where it's at Edited January 14, 2017 by ZicoKelly Quote Link to comment Share on other sites More sharing options...
Boby Brno Posted January 14, 2017 Share Posted January 14, 2017 Only an opinion but a lot has to do with a change in social attitudes. When I was 18, I got engaged. We then spent the next 3 years saving for a deposit for a mortgage. The 12 months before we married, I had a full time job, part time job at a petrol station and I also worked Saturday nights at the papers in Manchester. The building society rules on lending were 2 1/2 times my salary and half my wife's (we had to be married to qualify) That's how it was in the 70's. Most of my friends went down the same path. Looking at both my lads and their friends, things are completely different now. Quote Link to comment Share on other sites More sharing options...
Moderators Casino Posted January 14, 2017 Moderators Share Posted January 14, 2017 And a bit of MIRAS Which I think they scrapped about 12 months into ours Always the folk in the middle Quote Link to comment Share on other sites More sharing options...
bgoefc Posted January 14, 2017 Share Posted January 14, 2017 And a bit of MIRAS Which I think they scrapped about 12 months into ours Always the folk in the middle As Brown said sneeringly at the time "A middle class perk" dismissing the fact it helped young people get a foot on the housing ladder. Quote Link to comment Share on other sites More sharing options...
captainmed Posted January 14, 2017 Share Posted January 14, 2017 (edited) Most countries rent anyway. What's the point in owning a house? Most leave to their kids as part of their estate only to be fucked by inheritance tax. Kids should be self sufficient IMO. Unless you're gonna sell it when u retire and enjoy the cash whilst renting somewhere smaller then owning is a waste of time, but something the U.K. has become conditioned to. Edited January 14, 2017 by captainmed Quote Link to comment Share on other sites More sharing options...
Moderators Casino Posted January 14, 2017 Moderators Share Posted January 14, 2017 Lots of retired folk won't have the cash to rent What then? Quote Link to comment Share on other sites More sharing options...
Sweep Posted January 14, 2017 Share Posted January 14, 2017 Lots of retired folk won't have the cash to rent What then? True. I'm still amazed how many of my mates have no private pension and currently rent. Fuck knows what they'll do in their dotage. My plan is to pay off, then when I'm older sell up and move to France or Spain and rent until I peg it. At the minute, where i live, rent prices are more than my mortgage anyway, so itvmales sense to buy Quote Link to comment Share on other sites More sharing options...
Site Supporter Tonge moor green jacket Posted January 14, 2017 Site Supporter Share Posted January 14, 2017 Pretty sure FA's do know what they are doing. There is a whole industry built around it Aye. A good IFA is invaluable. Quote Link to comment Share on other sites More sharing options...
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