Reply With QuoteI went the 'keeping my son alive' route, money best spent IMHO
Depends though, as the money could be working harder elsewhere than paying the mortgage. We went the mortgage route as it opened up freedom of choice.Originally Posted by noTAGlove
I went the 'keeping my son alive' route, money best spent IMHO
Houses?
I have not read the whole thread but I can't help but think this logic that raising rates lowers inflation as a concept is flawed.
I believe the logic is make people poor as they are paying huge mortgages so they don't have loads of spare cash to splash out on stuff and drive prices up.
But only 28% of households have a mortgage so they are hurting those 28%, typically the average middle class home owners who are working, whilst the other 72% are less impacted by rates and carry on as they were ...
Can’t fault you on that one.
We were promised low interest rates were here to stay. Houses were ridiculously expensive (especially in London) but low interest rates made the books just about balance. You need somewhere to live so those who have mortgages don’t seem to deserve special punishment. Most likely they were living within their means until hit by a cluster of highly improbable local and global events.
You have a point, but over the last decade and a half, well chosen watches were appreciating at well over the mortgage rate, so were at worst a somewhat risky guilty pleasure.
As above, it doesn’t seem particularly fair to hammer this group, interest rates are a blunt instrument. The BoE may not have any other tools but government might. Sunak says “We’ll get through this” - interesting use of the word “we” there! No doubt he will.
Last edited by Itsguy; 22nd June 2023 at 17:55.
On the plus side Monzo instantly made the interest on current account 3.7%.
Cant fault them compared to the other players. Lets see some 6-7% Cash ISA's back too soon I hope.
RIAC
I've always said if asked "clear your mortgage" your house is your home first and foremost.
I would say at this moment in time it’s impossible for anyone to say.
Go back to the end of last year and the general view was that rates would have peaked by now and be coming down at the end of this year. A couple of weeks back they were intimidating that there was another 1.25% to go to take us to 5.75% and rates would start coming down in 2024. Over the weekend 2025 was being touted. Different views from various Economists, ex Bank of England deputy governors, fund managers, investment houses etc. All as clear as mud!
Only consistent story that seems to come out is that the government, Bank of England and economists in general think that rates need to keep rising until inflation is combated. Even if it puts us in recession, which many people personally would say has already happened. A lot of people don’t think that it will work as there’s too many external factors contributing to inflation and this approach is just making people suffer more.
Whatever the case, hopefully lenders have overdone the mortgage rate rises that have happened and some better deals start to come out again. Wishful thinking maybe but fingers crossed.
Thanks, makes sense.
I don't typically make many financial decisions that turn out to be wise, but fixing my mortgage in December 2021 for 5 years at 1.34% was surely up there!
Fantastic rate the way things have gone. Good move :-)
Great call. Well done Ryan 👍
Completely agree with this. I personally think this Government are now resigned to an unavoidable recession by the end of Q3 this year and there is no easy answer to the huge issues at play and all at the same time.
Brexit has played a HUGE part of those external factors in the Uk that also include Covid, the Ukraine war and the increased volatility in the swap rates.
Was down in Mayfair this week. In a coffee joint overheard some conversation and can tell you - cost of living crisis? What’s all that about…
Different world.
Hardly highly improbable - and living within your means obviously includes a cushion for a worsening of conditions, basic finance lesson #1.
Well done. You are on easy street for the foreseeable.
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You seriously think the covid pandemic and lockdowns, the invasion of Ukraine and… let’s just say the B word don’t count as surprising?
The vast amount of money printed, ZIRP for 12 continuous years and a stamp duty holiday to really stoke the bubble certainly wasn’t.
So Covid, Brexit and Russia invading Ukraine were all highly probable? Do you have heat stroke?
Lucky you for being so on the ball… the economy crystal ball. Jesus! 😒
So, it's to be recession or bust then!
iirc the UK squeaked the first quarter of 2023 with a revised O.1 percent growth, you need 2 quarters of negative growth to declare a recession...wondering what Apr to June figures will show...
Last edited by Passenger; 22nd June 2023 at 19:53.
You are forgetting the mass of people that rent. Their rents will be tied to the interest rates their landlords are paying. They will either get increases they can't afford or the landlords will try and sell out from under them.
Less so than home owners because only about 50% of the private rental sector is mortgaged. Whilst rents are going up on average they are not going up as fast as mortgages falling off fixed rates.
Even if you add half of the PRS to the 28% of mortgaged owners you still have 62% of households unaffected by these interest rate increases.
Years ago signed up to a mortgage that tracked base rate less .5% for undefined period. Once rate reached .25% the bank wrote off the existing amount as the admin was more than the interest payment!
RIAC
LLs are dumping flats and 2-beds due to the Tories making private letting a mugs game. Combine with first-time buyers who over-extended on 4.5x earning multiples to buy similar properties and a 30% drop in value in hot-spots is possible.
Whenever there's a UK house-price slump, it's quality properties in good locations which go side-ways, the actual drops are in the undesirable locations.
It's harder to quantify the impact of people being OK with buying further out from London because they can WFH, plus the impact of white-flight from Birmingham, Croydon, Luton, Enfield etc. This may explain the price rises in Cambridge, York, etc.
UK inflation remains high because of high input costs, mostly energy costs because of the 'green' levies for the net-zero fraud which far outweigh Brexit-driven costs.
NB On a side-note, will we see distress sales of PP, VC, AP and Rolex as peeps need to cover mortgages. Could be some value in Sales Corner.
Last edited by J J Carter; 22nd June 2023 at 22:30.
Well that’s a delightful sentiment towards your fellow TZ members here……I hope you do well out of others “distress sales” anyway.
Ally is family money. Will do alright.
I preferred it when he was just in the Covid thread.
It’s not him is it?
Something about him…
Can I ask a question please, I have 2y 2m to go on my 3.54% mortgage but could pay it off in 9m from savings if I used the overpayment allowance etc.
Over always been brought up on the idea of clearing the mortgage asa but would you pay it off or put the cash elsewhere for 2y?
Sorry to clarify, the fix is for that time, the end date is scheduled 3y2m and there's a 600 early pay charge if I clear faster than the 9m
Great result Ryan
For the likes of noTAGLove they don't seem to realise that it's punters like Ryan that the government/economy loves.
Payes loads of PAYE and him and his Mrs spend rather than pay off the mortgage quickly.
This is what keeps our economy afloat.
noTAGLove-You seem to be incredibly frugal(tight) and seem to be pretty obsessed by savings and not actually spending any money despite clearly having a well paid job.
I can honestly say I've never really saved in my life and pretty much spent it as I got it.
It was spent on the house, on cars ,on going out,clothes when single, on nice family holidays,etc.
I'm glad I enjoyed myself when I was of an age to really enjoy it as opposed to saving for when I'm 60 plus just so I could have a more comfortable retirement and then leave it to the kids when you kick the bucket.
Honestly enjoy it now whilst you have your health-maybe even buy a decent motor as a treat .Go on do it.
Last edited by Hood; 23rd June 2023 at 08:51.
This. That ridiculous nonentity Hunt can spin it any way he wants, ubt massive money printing has driven us to the cliff and it's NetZero costs which are pushing us over the edge. They could pause policies, announce some stimulus and rectify things fairly quickly, but they're going to let the BoE drive the country into recession instead.
If your fixed rate is reasonably lower than a savings account, it can pay to stick it in savings. There are mortgage calculators available online that will do comparisons for you
Last edited by Scepticalist; 23rd June 2023 at 05:28.
And as you get older you will appreciate having lived as you have, you can't buy time, enjoy (sensible) why you can with few regrets.
Also as I have got older I have realised the things I spent the most money on had the lease value and the things that were free are priceless.
RIAC
Completely with you. Hessian sack shirts are not the way to live your life, and many lifetime experiences are not free!
Santander? I'm still on mine although it's slightly above rather than slightly below base. Best financial decision I ever made (more luck than judgement).
id agree with the sentiment that material items really dont matter (and i say this as someone who buys plenty of them) but spending money on holidays and the best house you can get (within reason) makes for a happy family life and that, for me at least, trumps all else.
it has always been thus... :0(
If you only have 3yrs 2 months left on the mortgage, surely you just use the time on the fix at 3.5% at the end of the fix just pay off the balance with savings.
If you can earn more than 3.5% easily which you can with a instant access with Monzo at 3.7% as of yesterday.
You can get over 5% on fixed savings, so you'd literally be throwing away money
But there is a security in having the mortgage clear, that you may consider of value too
We're just finishing up a new build and had the opportunity from the sale of our previous home to clear the self-build mortgage, but I decided to invest the cash and try and out perform the mortgage interest. YMMV and certainly not advice!
Problem is that inflation in the past was often caused by overpending on non essentials. Raise cost of credit and inflation falls. BUT, now we have energy and food inflation. How are high interest rates going to impact those two...
I thought the rate would rise but not as much, I locked in till 2027 at 1.29%...turned out to be a fantastic decision
Should have gone for the 10 year fix in hindsight, hopefully things will calm down a bit before my 5yr fix ends in 2026
Three more years at 1.29% here. Fixed for five but could have had 10 at something like 1.32%. Stupidly thought we would remortgage for an extension after five years. Probably not at 6%!
Buy what appreciates. Lease what depreciates. This arrived 2 weeks ago. But, thanks for your concern.
damn, really?? im a mathematical idiot, i guess that's how it all compounds up over 20 years?
Alliance & Leicester. Brought out by Santander who kindly wrote of quite a few grand.
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RIAC
Good to see joined up government.
BoE increases rates because it’s “necessary” to control inflation. Government calls in banks and building societies to work out ways of circumventing the impact on borrowers.
https://www.bbc.co.uk/news/business-....65990833.page
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