Mortages

Oh good! Does this mean that savers will at long last be offered a reasonable return on their savings.

GrannyRose15

Oh good! Does this mean that savers will at long last be offered a reasonable return on their savings.

😂😂😂😂

Sounds a bargain compared with what we paid between 1969 and 2003. Then 6%, would have been our idea of heaven.

We started around 7% and it wandered up to 13% at one point.

M0nica

Sounds a bargain compared with what we paid between 1969 and 2003. Then 6%, would have been our idea of heaven.

We started around 7% and it wandered up to 13% at one point.

We weren't being lent stupid amounts on the premise that low interest rates would continue in the 70s and 80s.

It is up to people to make their own decisions about what will happen in the future, to the extent that any of us can ever know, even governments and banks,

In every part of our lives people are always prepared to 'sell' us things and it is up to us to make our best judgments as to whether we can afford a new car or a second -hand one. DSimilalry with house loans. The first consideration is how much you think you can reasonably afford to pay.

We always made our own calculations about just how much we could afford to borrow, which was generally less than the lenders were prepared to lend us. In our case it meant a 90 minute journey to work on a not very good trainline compared with a house a 30 minute journey from work, on a frequent suburban line. We made all sorts of other decisions based on our level of risk and both lost as well as won on them.

I see no reason why that sort of decision making should be any different now than then.

Millions of home owners have never known interest rates on their mortgages anything like they were in our younger years though Monica, the rate rises in 2022 took mortgage rates to the highest for over twenty years. Your financial decisions are based on your experience, theirs are based on their experience. House prices are also a lot higher compared to income, and mortgages are based on two salaries. When I took out my first mortgage in 1985 it was based on 3x my husbands salary plus 1x my salary. I was a career girl, and was most offended, but that was the norm.

Swings and roundabouts, it will be good to have interest on savings after zilch for years.

GrannyGravy13

Swings and roundabouts, it will be good to have interest on savings after zilch for years.

Unfortunately I’m watching Martin Lewis now, and he is saying not to expect great rate rises on savings, apparently they are linked to gilts (whatever that means!).

I'd gladly do without interest on my savings if it meant my children could afford to keep their houses

Casdon House prices will always rise to the point where essentally all houses available for sale will sell. Any higher and lots of houses will be on sale but not selling.

House prices now are high because interest rates are low. At the moment house prices are falling for a combination of reasons, but the main reason is because interst rates are going up.

Yes, in the past multiples of incomes, especially second comes were lower, but there is nothing to stop lenders returning to one income only, and if they did, house prices would tumble, so that we got back to the equilibrium of the number of buyers and sellers being roughly equal.

Buying your first home and paying for it for the firsst 5 years has always been a struggle. I can remember when couples would be engaged for 4 or 5 years while they struggled to save enough to have a deposit on a house.

This is exactly what we did MOnica. We got engaged and then saved hard while still living with our respective parents.
Once we had sufficient deposit to put on down on a mid terrace house on a new development, we set the wedding.
We were determined to buy and not rent.

M0nica

Casdon House prices will always rise to the point where essentally all houses available for sale will sell. Any higher and lots of houses will be on sale but not selling.

House prices now are high because interest rates are low. At the moment house prices are falling for a combination of reasons, but the main reason is because interst rates are going up.

Yes, in the past multiples of incomes, especially second comes were lower, but there is nothing to stop lenders returning to one income only, and if they did, house prices would tumble, so that we got back to the equilibrium of the number of buyers and sellers being roughly equal.

Buying your first home and paying for it for the firsst 5 years has always been a struggle. I can remember when couples would be engaged for 4 or 5 years while they struggled to save enough to have a deposit on a house.

This explains what I was trying to say better than I can Monica.
www.leedsbuildingsociety.co.uk/_resources/pdfs/press-pdfs/press-releases/housing-is-now-at-its-least-affordable.pdf

I think too much focus is on buying a home.
If only we had long-term quality rentals like so many European countries maybe all this would stop.

We did the same as Jennifer - by both working 2 jobs, then saving like crazy for our deposit. I also watched Martin Lewis last night and think I need to be more pro-active.

Like

Notspaghetti I agree. In the past one third of the population lived in Council houses, with security of tenure and reasonable rents.

Mrs Thatchers selling off of council homes at reduced prices meant that any people bought their existing home, which they couldn't do if they had had to pay the market prices. The result has been that with the reduction of council/HA housing availability and a policy of charging market rents, means that many people have come from homes, that there parents bought at reduced prices, and expect to own a house themselves. They also cannot afford to rent so are pushed into house buying, when they would be much better off in an old fashioned council house with security of tenure and an affordable rent.

Thanks for that link, Casdon. Perhaps it might change a few minds.

Now, I wonder who is going to pop up to tell us that they paid 27% interest on their 1970s/80s mortgage...

I know, M0nica! And we have some of the worst housing in Europe as well - and even our new properties could be so much better!

NotSpaghetti

I know, M0nica! And we have some of the worst housing in Europe as well - and even our new properties could be so much better!

Not only that, but MOnica omitted to say that we have a serious shortage of housing in the UK, so, in classical market fashion, house prices have risen to exploit the shortage...

Sufficient housing would mean less competition for what is available and less supply driven inflated prices.

MaizieD

Thanks for that link, Casdon. Perhaps it might change a few minds.

Now, I wonder who is going to pop up to tell us that they paid 27% interest on their 1970s/80s mortgage...

😁
20% mortgage rate in Australia!

I notice house sales have slowed right down around here.

Varians opening post was dated October last year rates have now stabilised and mortgage rates for fixed rates are on the whole running lower than this.
We have has a period of very low rates they have now risen to a more average level.
We may see a reduced amount of housing on the private rental side due to increased rates and buy to let's becoming harder. Some may say this is a good thing but housing authority properties appear to be in short supply.

Our first mortgage started at over 9% and went up to over 15% by the time we moved in. We took a low cost endowment for our second mortgage and it turned out to be one of best financial decisions we ever made.
It’s good to see that savings rates are slowly creeping up as being a pensioner I have no opportunity to increase my income.

Grannybags

I'd gladly do without interest on my savings if it meant my children could afford to keep their houses

I'm right with you there, Grannybags 👏

Fine for you MaizieD and Grannybags, but for many people the difference between getting £100 a year interest and £500, could be the difference between having to choose between food and heat and being able to afford both.

I doubt higher mortgage rates will translate into significantly higher savings rates. The bank's will pocket most of the difference. In any case, savings rates below the rate of inflation are 'losing' rates