Yes, I am back to having a big mortgage but it is serviceable (£650 a month at the moment) but already the house we paid £392k for last July are going for £500k+

£650 a month is a pretty small mortgage on a £392k house is it not?

£650 a month is a pretty small mortgage on a £392k house is it not?

Well yes in this day and age I suppose, but with the end in sight of the smaller mortgage I had, it does seem a large undertaking.

OP Calculate your repayments at 5,6,7,8%. Things look pretty good now from a borrowing point of view but in 5-10 years when interest rates ‘normalise’ a big pricey house might be more of a burden and harder to shift. If it still looks affordable then off you go.

OP Calculate your repayments at 5,6,7,8%. Things look pretty good now from a borrowing point of view but in 5-10 years when interest rates ‘normalise’ a big pricey house might be more of a burden and harder to shift. If it still looks affordable then off you go.

Will they ever normalise? I’d be interested in anything that demonstrates how many people would repossessed at 5,6,7 % these days as my feeling is it’s knocking on half of all buyers are overstretched through lack of choice. Wages just don’t keep track with house prices, and in a UK market I’m not sure they ever can (houses would just inflate even more if I got a 25% pay rise for example).

One way to look at is is it’s like renting, but you have more security (harder to evict a non-paying ‘owner’ than a non-paying tenant) and you know the monthly outgoing is relatively fixed?

Another way is that you’ll end up aged 65 with negative equity and a mortgage you can’t pay off.

These threads both scare me and make me glad I’m sensible.

Another way is that you’ll end up aged 65 with negative equity and a mortgage you can’t pay off.

You would need to be particularly stupid to borrow so much that you could end up aged 65 in negative equity (assuming, that is, there isn’t the mother of all housing crashes) but if that happened, we’d all be living off handouts and eating in soup kitchens, paid for by the 276 people in the population that were sensible.

Simply get the most expensive house you can afford now, live the high life until just before you retire and then have ‘an accident’ with the wife. You live in a great house, your insurance pays the remainder of the mortgage off, your kids get the fully paid for house and you won’t be there getting old, smelling of wee and pissing everyone off with your mountain biking stories.

Everyone’s a winner.

You would need to be particularly stupid to borrow so much that you could end up aged 65 in negative equity

Just after the first crash, a colleague wanted to move from a 2-bed to a 3-bed. They were in negative equity, so switched the mortgage to a buy-to-let and rented out that house, then got a new mortgage for a 3-bed house.

They now have two mortgages for more then either house is worth.

They now have two mortgages for more then either house is worth.

File under

You would need to be particularly stupid

EDIT: Unless, of course, one of them has rich parents in ill health….