My eldest daughter has just exchanged contracts on her first-time house purchase, a new build, assisted with the government's help-to-buy scheme and of course dad's help.
Just as well she took dad's advice (well, some of it) and left plenty of head-room with her forthcoming mortgage repayments.
We had an endowment to pay out 64K, predicted drop to 30k.data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7. It recovered a bit at 47K.
40K ISA was predicted to under perform, paid off on track.We were still 10K short but an inheritance saved us.Hopefully interest only mortgages will be banned.
We still got a few years left, but we went for a very traditional repayment mortgage at 3x solely on my income. Also listened to my parents / grand parents to play it safe.
We need to get back to more normal rates, problem now is we have a generation of borrowers who think mortgage rates of circa 2% or less is normal, they are in for a shock. Particularly as the poor dears are so hard done by.
"poor dears" you really are a bit saddo data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7
Always nice to receive a welcome back data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7
2% and less SHOULD be normal -
If it creeps up to the levels of the 80's, something is fundamentally wrong with our economy - in the 80's, her name was Maggie.
In the the late 70s 80's we had large wage rises as the unions were still powerful which led to high inflation and high interest rates. Oil prices didn't help either. I took out a mortgage in 1987.
Fortunately I opted for a boring repayment one and wasn't tempted by all those endowment salesmen. If you can make extra payments along the way, you can pay it off and save a lot of money on interest.
But I do remember a few years later, the interest going up by 3 % or so, and it wasa bit of a shock! Fortunately, the rate dropped shortly after and I could buy the furniture.
I’ve been on a tracker since late 2006, it’s been win win all the way... thinking about moving to a fixed, although suggestions are rate could go to only 1% by 2020. Not sure it worth it..
Maggie was the person responsible for saving the economy- Labour wrecked it during the 70's and had to go begging to the IMF for a bailout. Did your teacher not mention that?