6% mortgage rates

[spring33]

Old thread https://www.mumsnet.com/talk/property/4813815-5-mortgage-rates?page=1

New thread, let's hope the next one won't be 7% interest rates or higher.

Well you can always add another zero at the end so it's relatable for you? Some people always have excuses as to why things don't work for them. London prices have always been atypical for some and positively cheap for others, like every international city of any worth anywhere in the world. That's got worse because our economy has been trashed by low productivity and free money subsidising living standards that cannot be sustained without even more free money. The US resetting rates is finally rebooting the market. As for my very sensible colleague, they chose to exit the pyramid scheme and took the risk for a very long time that the world would have to exit its free money scam. That this was not done by others makes them losers in the scam which they were happy enough to stay in.

Why would adding a 0 to 4,000,000 or whatever it was make it more relatable?! I know plenty of people who've bought in London; don't know anyone who dropped a million+ on a starter home. It's very obviously not a relevant situation to 99% of people.

oops aren't you with the eight figure brigade?

It surely has no lessons for those who don't learn but that's always the case isn't it?

Look at commercial property for unbridled price adjustments, as well as most other assets. That's how interest rates work.

@maryso Why don't you try to pad things out with some figures because the story just doesn't make sense without. Where are 30% discounts happening right now in the residential market because the media aren't reporting that. I'm currently looking to buy so would be very interested. It's really hard for me to understand where you can buy now that is so cheap compared to 2008 prices that you would recoup 11 years rent. I'm not trying to be difficult, it's just a puzzle that you've raised and I would be interested to know how it works.....I'm currently renting and the market is dropping, but it's a helluva way to go before houses reach 2008 prices.

It's not a spurious amount or, if it is, it's only because you won't give the exact amounts but are insisting on a claim so ridiculous the only way anyone would believe it is if you could provide figures to back it up.

The amounts are only based on what you've said. First of all YOU said they'd spent more than 2xaverage uk house price in rent. So 2 x £285k = more than £570k.
Then when I said those figures made no sense YOU said "I suspect that they probably spent more than that on rent" and YOU also said "Just scale it up or down as needed if that helps you relate"
So I tried scaling it up and the numbers still didn't make any sense.
Tried scaling it down and they made even less sense.

It's not the 50% reduction that I'm obsessed with, or that's the issue, it's your insane claim that they have now bought a house in 2023 at the same price it would have cost in 2008! I can't see any evidence of house prices dropping anywhere near that much anywhere in the country.
Now you're saying that prices have dropped that much commercially. So, irrelevant to the RESIDENTIAL property your colleague purchased?

And that they managed to afford this drastically reduced home because the cost of the house was 3 times the savings they made in rent.
Thus by your own information they spent somewhere between £570k and £1million in rent over 11 years. Whilst also managing to save for a deposit for a house costing between £1,710,000 and £3million, which magically is the same as it was worth in 2008.

If you a) can't suggest figures that make any sort of sense with your claim and b) think those figures are anywhere near relatable or achievable for the majority of the population, then don't be surprised that people don't fall over themselves to agree with the point you're trying to make, because it's very obvious it's all completely made up!

All of this would be very interesting, if this family and their circumstances actually existed.

You certainly won't get any amounts just because you can't do simple sums and demand someone else works it out. You don't get it because of the barrier in your mind combined with being arithmetically challenged. Not my problem.

Not the slightest bit interested in whether you agree with me. Perfectly happy you think it's made up or idiotic, since that's clearly what you need to justify why you're losing your bet on house prices. Not interested in the losers who bought badly and face being squeezed when the real world resets itself because of the obvious entitlement of people like you who don't get that inflation will only abate when productivity increases and cheap money has to be repaid in spades. The next rate rise can't come soon enough and even then borrowers will still be leeching money at 30% discount. Time to wipe that out so peeps pay for what they borrow.

Well they aren't you, that's for sure!

You do know that some people have equity when they sell up, sometimes they also have no debt because they've been gifted negative interest rates for years and repaid their debt? They're not all continuing to leech off negative rates living an unsustainable lifestyle. You do know that houses are often more than £3m in London, especially the ones that don't get traded often. An inability to grasp these simple facts and issues with arithmetic are very much at odds with understanding, hence ignorance and denial are the consequence. That about sums it up here.

What a strange poster

Indeed

Well no, I’m sure I would have recognised my own circumstances if you were describing me 🤷🏻‍♀️.

Imagine knowing so much about your colleagues finances and decision making processes. I don’t know where most of mine live, let alone their ownership status or housing market tactics.

To be fair, I used to sit next to a lady at work whose personal life and financial details I knew in detail because she told me. But the poor love was stressed to the eyeballs.

I didn’t used to believe people like her existed, but they do. David Lloyd membership, Jaguar 4x4, £400,000 Mortgage , whilst they only earned 120 grand between them. Every birthday and Christmas the kids have piles and piles of shit with balloons. Couple of holidays a year. It just didn’t add up.

That's an easy one to solve. I expect her or her partner had family money and a parent or grandparent gifted them money from time to time.

In my experience, the people who it really doesn’t seem to add up for are also the “piles of shit with balloons” people.

The next rate rise can't come soon enough and even then borrowers will still be leeching money at 30% discount. Time to wipe that out so peeps pay for what they borrow.

People have been paying for what they borrowed at a rate set by the organisations from whom they borrowed based on a rate set by the Bank of England.

You seem disproportionately angry towards borrowers.

Indeed, although providing a character reference for a rental does reveal going into a rental. It's crass to ask for someone's details to be pasted on MN even if I had these. Much can be deduced from stamp duty thresholds and price reductions from sales of that area. The trouble is people can't see past their noses yet wish for what is beyond their little sums. Lower end priced housing is also behaviourally more susceptible to overpricing.

Back to the thread, US 30-year mortgages are at 7%, inflation 3% and base rate 5.25%. Our SVR is below their 30-year rate, inflation 8% and base 5%. Our major retail lenders have been stress tested to 17% inflation, 30% house price falls and 8% unemployment. Banks are sound and ready to go, public sector pay rises will be unfunded which mean productivity increases. Go figure, or not, which seems to be the preferred option. Of course we will all get through this, at least we're not sending people to war, but the cost of war cannot be avoided.

BTL is escaping to plentiful better pastures. The lower end of the housing market will still attract people with the room to buy less if they're prepared to overpay, while the upper end and middle prices will decrease much faster. So lower end sellers may attract buyers who can afford due to looking there instead of where they would have looked when free money was cheaper. They may be overpriced but not as much as before, depending on how much buyers are prepared to be idiots.

Not at all since I'm not personally exposed to the Great Subsidy.

If posters are interested in the mortgage rate, they will know this must rise, and the rises so far with the baked in future rises are what has steadied sterling. Posters who expect and plan and act as if this won't happen or that they won't get through it or feel entitled to even more subsidy must expect the same muscular response as their entitled demands. None of this behaviour is going to stop rates rising, because MN has no effect whatsoever on this long overdue correction.

David Lloyd membership, Jaguar 4x4, £400,000 Mortgage , whilst they only earned 120 grand between them.

Why would a 400k mortgage be crazy on an 120k income? It's borrowing less than 3.5 times their income.

I am beginning to think you are an AI bot.

Occasionally I will order a colouring book and it looks beautiful on the cover and makes sense to buy it, but when it arrives it makes no sense whatsoever, has an arm coming out of a neck, disproportionately long legs, is blurred along half the lines but not the other half, etc.

You remind me of dsyfunctional colouring books.

Which makes about as much sense as anything you have said.

Yes to form you're ignoring the real world, and the possibility that some people are capable of holding more than a few thoughts and facts in their minds. Those people must be robots because they're not like you.

US vs UK facts, where the markets are. Take your time, or give up, either will not stop the rate rises and productivity pressures,

It wouldn’t be in isolation it’s along with everything else.

Mary, I think you need to take up a hobby as you seem to have too much time on your hands.

As you also don't seem to live in the real world I am happy to suggest a series of AI created colouring books, if you like?