Five-times-salary mortgage offer... ???

[MrsBonfire]

Five-times-salary mortgage offer

all I can say is blimey!

just a case of market forces..

Even w/a mortgage 5x our salary, we STILL wouldn't be able to buy here. The average price of a two bedroom 'home' here - b/c 70+% of hte housing stock here is flats - is £200,000.

this really scares me. it basically lifts the lid on a whole new era in house price rises. where is it all going to end - when all of us have a 10x mortgage just to outbid each other? paying 90% of salary each month just to buy a house????

it's bananas!

bring on the recession..

we would qualify for a 5x mortgage because joint income is above 50k, however, refusing to because prices are sooooo overinflated in our area and I'm not paying 250k for a delapidated 2 bed place!

DS2 is saving with a view to buying a place of his own. I would certainly advise him against a 5x Salary mortgage even though he has a well paid & secure job. We bought in 1979 and suffered badly because of high interest rates/low pay increases during the 80s & early 90s. It wasn't simply a case cutting back on holidays & other luxuries. We sometimes struggled to buy food. We knew several people with young families who lost their homes....interest rates are low now but ours went up to 15 1/2% at one point.

It is utter madness imo. Mrs Bonfire (Badger normally?) is right. Houses are just not worth these ridiculous prices.

Our mortgage lender doesn't use a salary multiple, but an affordability calculator. All I can say is their definition of affordability is wildly at odds with our own. I was shocked at how much they would lend us. We could never afford the monthly repayments.

only way we could get a mortgage was calculate in overtime... saying that, if DH cant get it, his flat rate would just cover the mortgage, council tax and utilities!

House prices are already at that level round here - and more.

good guess Calisto but I'm usually MrsBigD

If anyone feels strongly about being priced out of the housing market, there is a pressure group called "Priced Out" which tries to stick up for the interests of first time buyers and families who can't afford to buy a home.

Another interesting site is House Price Crash

I'm totally priced out. But I just can't be bothered to give a toss anymore.

I think the bank is going to own a lot of these houses in the not too distant future. It really does beg the question of what is in it for them? I mean, surely the bank knows the risk it is taking. And surely there are going to e a fair number of defaults. Whay are they granting these loans?

why are they granting these loans? because they are greedy buggers I say!

But it is they who aren't going to see their money back. Perhaps they figure if say 5% default and they have to repossess the house they make enough on the 95% who do repay to still turn a profit. Who knows? Not I.

I feel very let down by the govt who have allowed it to get this bad for ordinary families. A mortgage of 5x salary is a ridiculous amount of debt to maintain.

The people I really feel sorry for are the DINKYs who think they can afford the mortgage and then have children. Or even worse, they don't even have children because they couldn't afford the mortgage then.

5 x salary is affordable in certain cases because the basic amount of money you need left over after you pay your major bills is around the same for everyone. So as long as you have that left at the end of the month and can live on it, the banks are happy to lend the money.

We just borrowed 4.5 x my DH's salary, plus 1 x my salary on an interest only mortgage. Bank are happy that we can afford it and we're happy to economise considerably on everything else for a few years in order to have the house we want now.

We pay 50% of our take home income on rent.

But, twelve, it's 5 x both incomes. I'm not sure whether or not I hold the government responsible, but surely there is going to a be a big problem when people who don't own houses start to retire and need a place to live. What is the government going to do then?

I'm not going to try and get on the property ladder in this very inflated market. I think I'll give it a couple more years to come dow, and if it doesn't, then I think I'll set me sights on living somewhere outside the UK. It will be a pity if that happens because I like it here. But, I simply can't afford it.

I see your point, Uwila, I truly do.

I'm here spinning my wheels and butting my head against a brick wall in the same boat myself.

I can't see a house price crash happening unless something else happens to knacker the economy. There are too few houses for too many people. We have more people coming to GB than leaving which puts added strain on the market and then you have the lovely buy-to-letters putting even more strain on. Absolutely no wonder policemen, teachers, nurses etc can't afford a house.

I am also quite astonished by the national obsession with house ownership. It is like a holy grail for most people.

Callisto, the 'have to buy house' mentally first really surprised me when I moved over here. I grew up in a 'rental economy' buying a house, happened, if at all, once one got a house specific house policy paid out, i.e. you saved, then you bought It's changed a bit now though, however still most people rent. Much better that way I think, even if the money you pay is 'dead' money