Mortgages

[dinny_g]

I'm really glad we paid the penalty to get out a year early last November. The way things are going we'll have made that money back within the year.

One thing I have noticed is that Early Settlement fees have increased massively compared to 2 years ago.

[Rich B]

I'm really glad we paid the penalty to get out a year early last November. The way things are going we'll have made that money back within the year.

One thing I have noticed is that Early Settlement fees have increased massively compared to 2 years ago.

yeah, they don't want people getting out of these ones!

[Matty]

My early settlement on my mortgage - 5 months before it ended was £6500, madness.

How's the tracker doing Matty?

Still cheaper than the equivalent fixed

This hasn't aged well TBH. I was on 3.74% back in Feb, now on 4.74%....with it looking to jump to 5.24% if the expected 0.5% kicks in.
Cheapest fixed rates, albeit for 3-5 years are currently 4.5%

Thankfully I've not splurged the Alfa money yet so that's at least offsetting some of the damage.

[Broccers]

My early settlement on my mortgage - 5 months before it ended was £6500, madness.

How's the tracker doing Matty?

Still cheaper than the equivalent fixed

This hasn't aged well TBH. I was on 3.74% back in Feb, now on 4.74%....with it looking to jump to 5.24% if the expected 0.5% kicks in.
Cheapest fixed rates, albeit for 3-5 years are currently 4.5%

Thankfully I've not splurged the Alfa money yet so that's at least offsetting some of the damage.

Hopefully getting out of it isn't too expensive.

Love the post though. Most forum daddies were wrong, again.

I've actually read this whole thread back. Embarrassing, especially those should know better.

[Jobbo]

Fair enough. Perhaps @Broccers can give us his view.

No I can't thick cunts

Your input was so insightful

[Holley]

The rate rises have been a bit of a nightmare.

I've had some clients mortgage payments increase by over £900 per month with no alternative. The unsympathetic argue that people shouldn't have maxed themselves out in the first place. This might be true in some cases, but the majority I've seen is that was the price they had to pay just to get on the property ladder or at the time it was well within their means.

The BTL market is a mess. Had clients that can't switch rates because their lender doesn't have that as an option (for example Landbay) and they can't remortgage because stress testing on rental income has increased significantly (currently need about £800 per month rent for every £100k of mortgage). Have lots of clients now on the standard variable rate as the rent they get isn't anywhere near high enough.

Getting residential and BTL remortgages through is a challenge as surveyors are being much more cautious and seen quite a few down valuations.

I read that repossessions are up 50% in the last quarter and it's easy to see why.

From where I'm sitting, it's difficult to see how continuing raising rates is beneficial.

Painful seeing clients struggling, very unpleasant with worse likely to come

[jamcg]

I’m lucky in one sense that I made some terrible monetary decisions when younger and am stuck in rental. I rent from family with no mortgage on the property and they’re happy with the amount they get each month, plus I do all the maintenance so he never hears any problems with the place

However I can imagine it’s awful hearing your rent is going up, your mortgage is going up etc. There’s private rentals either side of us and they’ve both gone on the market to be sold so looking like landlords getting out. They can’t be in any rush though as they’re both about 50k over the ceiling price of my road

[Simon]

I've said it before but central banks the world over, ours included, have fucked this right up. They've completed ignored house price inflation for the last 2 decades whilst allowing historically low interest rates, then ratchet up interest rates to and tackle supply side inflation (rather than an over-heating economy) and then have surprised pikachu faces when inflation doesn't come down again. Well dur. What a fucking mess.

[Sundayjumper]

They can’t be in any rush though as they’re both about 50k over the ceiling price of my road

Or conversely, maybe they're priced optimistically because they're underwater and that's the amount they need to clear their mortgages.

[Holley]

They can’t be in any rush though as they’re both about 50k over the ceiling price of my road

Or conversely, maybe they're priced optimistically because they're underwater and that's the amount they need to clear their mortgages.

And CGT. Have a client who's mortgage is £550k and property is worth £750k. But the mortgage was only £200k when he bought the house with various remortgages along the way to release equity. Problem is CGT is calculated from the original purchase price meaning it's hardly worth him selling.

[dinny_g]

Similar to Jamcg, we made some, with hindsight, poor choices in the early stages of our relationships and as a result, our mortgage won't be cleared until our early 60's.

However, when we bought our current house, we borrowed significantly less than we could "afford" so had plenty of room for rate rises. But the mortgage has gone up £400, our energy has gone up £150, food up £100 etc so this has taken a big chunk our of our wriggle room. Still have enough but it does mean a little belt tightening.

But taking the long view, things will change (octopus costs will reduce by 17% in July for example) so we're set for the next 3 years, can still overpay so we could be a lot worse off

[GG.]

The rate rises have been a bit of a nightmare.

I've had some clients mortgage payments increase by over £900 per month with no alternative. The unsympathetic argue that people shouldn't have maxed themselves out in the first place. This might be true in some cases, but the majority I've seen is that was the price they had to pay just to get on the property ladder or at the time it was well within their means.

The BTL market is a mess. Had clients that can't switch rates because their lender doesn't have that as an option (for example Landbay) and they can't remortgage because stress testing on rental income has increased significantly (currently need about £800 per month rent for every £100k of mortgage). Have lots of clients now on the standard variable rate as the rent they get isn't anywhere near high enough.

Getting residential and BTL remortgages through is a challenge as surveyors are being much more cautious and seen quite a few down valuations.

I read that repossessions are up 50% in the last quarter and it's easy to see why.

From where I'm sitting, it's difficult to see how continuing raising rates is beneficial.

Painful seeing clients struggling, very unpleasant with worse likely to come

Yes all a bit of a shit show. In some ways I dodged a bullet as we were thinking of moving a couple of years ago and would have been in exactly that situation where we'd have probably doubled our mortgage and then in 2025 or 6 it would have been squeaky bum time if rates remain around this level.

And by dodging a bullet I mean I get to stay in our small existing house and pay 40% more in mortgage repayments than when we bought it...

[dinny_g]

In our case, in reality, I don't think we'd be an any different a situation if we hadn't made the choices we did back then. Our loan to value is about 55% but if we had a bigger deposit, back in 2021, then in all probability, the Mrs would have gone down to a 3 day week so all in all, the impact of the current rate rises on our wriggle room would have been about the same.

Similarly, if I had bought her es-husband out of their home when we got together, then sure as eggs are eggs, I would have got caught up in the property boom back in Ireland and be bankrupt now.

This is why I don't do "What if's" - we are where we are, you can't go back so just get on with it.

[duncs500]

Thankfully got a few years left at our current low rate, just going to tighten our belts and pay down as much as we can in that time and cross my fingers that the rates drop. Unless something catastrophic happens with the rates (or life) though, I think we shouldn't be in any major grief.

Although I had been considering some life changes that might reduce our surplus. Will have to do some sums and decide whether that's still prudent.

[GG.]

Although I had been considering some life changes that might reduce our surplus. Will have to do some sums and decide whether that's still prudent.

Does it have 4 wheels?

[duncs500]

Although I had been considering some life changes that might reduce our surplus. Will have to do some sums and decide whether that's still prudent.

Does it have 4 wheels?

HaHa, I wouldn't consider that a life change, unless I was going to become a taxi driver or something! No, was thinking about making some work related changes, but I'm still mulling it over.

Although still very much a WIP, the Elise is a keeper.

[GG.]

Bank rate just went to 5

[scotta]

I've said it before but central banks the world over, ours included, have fucked this right up. They've completed ignored house price inflation for the last 2 decades whilst allowing historically low interest rates, then ratchet up interest rates to and tackle supply side inflation (rather than an over-heating economy) and then have surprised pikachu faces when inflation doesn't come down again. Well dur. What a fucking mess.

Exactly this. Inflation isn't being caused this time by people borrowing. Its increased energy prices and a shortage of workers that's causing this. Hiking the interest rate surprisingly (not) isnt working. It's just making folk struggle. The housing market is just mental and has been for the last 5 years. Our house has gone up nearly 30% in value since we bought 5 years ago.

[dinny_g]

Location dependant surely

I bough my last house in 2003 and by 2008 it had appreciated by £50k
However in 2011, it had lost most of that the mess that followed the banking collapse.
By 2021, it was worth £275k so it had appreciated by only £100 in 18 years. - not a staggering amount in real terms.

[Mito Man]

Net migration was 600,000 people here last year, and everyone needs a house.

Can’t be long before interest rates are rapidly cut though - maybe towards the end of next year, even London feels much less busier these days - I thought it was the school half term on Tuesday it was that quiet. Feels like everything is on the brink of crashing.