You know, back when I bought my house (1995), whilst you could get fixed rate deals, you were always then tied in to the base rate for about 2 years after your fixed rate had ended. At the point that mine ended my payments virtually doubled.

Wouldn't be surprised if they also brought back tie ins of this nature as well.

Funny how over the past few years many people would have been incredulous at any sort of restriction on borrowing or having a lower interest rate deal. We are starting to get back to the real world it seems.

Though I do feel for those who borrowed so much.

If the lenders hadn't eased off on their restrictions house prices would never have shot up so much in the first place and we would never have got in the position of credit crunch and people potentially not being able to pay their repayments because they weren't warned about interest rate rises and an end to cheap mortgage deals.

quote:

Originally posted by queenstomper:
You know, back when I bought my house (1995), whilst you could get fixed rate deals, you were always then tied in to the base rate for about 2 years after your fixed rate had ended. At the point that mine ended my payments virtually doubled.

Wouldn't be surprised if they also brought back tie ins of this nature as well.

Can you explain, QS?
We had a fixed rate from 1994-1999, and when our fixed rate finished and we went onto variable rate, our payments dropped considerably.

My fixed rate was a lot lower than the variable rate - but the mortgage deal meant I was tied in for 2 years before being able to search for another. So when the fixed rate ended my mortgage payments virtually doubled because the interest rates had gone up so much.

Similar to what is happening now, although people are being able to switch straight away so not being stuck on base rate they are obviously going to be paying more because they wouldn't be able to find a deal as good as the one they've had for the past five years or whatever.

Oh I see, it just worked out 'the other way round' for us. We took such a lengthy fixed rate because we wanted to guarantee we would not be paying any more than we did initially (we absolutely couldn't afford to) but it turned out to be the wrong decision as rates dropped over that period.

Those are the chances you take.

We have to remember that interest rates have been low, and still are relatively so, for a good few years now. Late 80s, early 90s saw much much higher rates than I have ever known in my home owner lifetime. So back in mid nineties you would still have that in mind, as would any advisors.

quote:

Originally posted by queenstomper:
they are obviously going to be paying more because they wouldn't be able to find a deal as good as the one they've had for the past five years or whatever.

except they won't

Highstreet banks are offering rate matcher deals (up to 95% LTV) where they'll match your previous fixed rate for a further 2,3 or 5 years.

yES malakie, and do you want to mention the arrangement fees and the Tracker rate once the fix expires? Once again, your not telling the whole truth.

You are also forgetting, not every applicant are getting these mortgages, many are getting turned down. There is half the cash in the pot there was last year, this is to cover MEW (which our economy massively relies), remortgages, and new purchases so we are pretty much stuffed.

why so glum?

let me give you a big hug

The ones I'm referring to can be totally fee free, and with no tie in period - comes from certain banks being less reliant on certain investments, and are happy to take business from those which are not.

I actually contacted my bank about something else recently, and asked about what happens to those people on 100%, or 95% mortgages if the value of their home drops. They confirmed that because they'd already lent the money they'd be happy to offer new fixed rates (fee free etc etc) because in the long run they'll always benefit.

So your doom and gloom version of the future is nothing but poppycock. Sorry you missed the property boat.

I don't get charged a fee if I stick with the SV once my fixed rate deal runs out... but if I change deals, even with the same lender, then I have to pay a fee. This is the same with every mortgage I have seen on the market. As the credit crunch has tightened, these arrangement fees have gone up and up... so I hope that my SV isn't too scary when I come to the end of my deal, as it looks like I may be stuck with it....

Ary.

You know, when I renewed my fixed rate last year, and the rates were even worse than when I started, I wished that I had gone with my instinct and gone for the 3 year fixed rate when I bought my house instead of the 2 year... now, it seems I am better off with what I have, as I would have been in a much worse position were I renewing now as compared to last year...

... So that's one positive to come out of it

Ary.

quote:

Originally posted by Aryldi:
but if I change deals, even with the same lender, then I have to pay a fee. This is the same with every mortgage I have seen on the market.

Then you simply haven't shopped around - HSBC have plenty of fee-free fixed rates at unbelievably good rates - thats me just picking one high street bank.........

Furthermore, most banks will wave the arrangement fee to keep your business when it comes to renewal time - there's no reason for you to accept the offers they make when your fixed rate is up. You have to 'haggle' with banks, otherwise they'll offer you the worst deals. Assuming you are in good relations with your bank there is no end of things they'll let go to keep your business.

Pays to shop around and haggle - then take that offer to a competitor and ask them to better it.

Malkie, examples and names of banks please, if you would.

You are starting to increasingly sound as if you are a man with something to lose, like a rather large BTL portfolio... Please tell me I am wrong?

Malkie, you are also failing to comment on the fact there is significantly less (and reducing all the time) cash to lend, how do you suggest things are "all a bed of roses" when the lenders really can haggle and increase their margins via arrangement fees and High IRs.

Oh, take it you havent seen this classic in the telegraph today?

quote:

Both Bradford & Bingley and HBOS-owned Birmingham Midshires, the two largest buy-to-let mortgage providers, each with 20pc of the market, require customers to top up their initial deposits if falling house prices mean the size of their mortgage rises above 85pc of the value of the home.

In a decade of rising house prices, the clause has been largely irrelevant but analysts are concerned that it may now convince landlords, who are already facing higher mortgage costs, to sell large chunks of their portfolios.

Housing experts have long worried that a flood of buy-to-let properties on the market could have a devastating effect on house prices. The International Monetary Fund is already predicting a 10pc fall this year.

Under the terms of the contract, if a £100,000 home with an £85,000 mortgage falls in value by 10pc the landlord has to find another £8,500 to maintain the lender's maximum 85pc loan-to-value rate - even though there is still £5,000 of equity in the property.

Ouch. Big ouch. I sense huge flood of properties on the market, especially since the regs regarding Capital gains at 18% have been in force since April 5th...

Today's Times has another cracker:

quote:

The big numbers

45,000 Estimated repossessions likely this year – up 50 per cent

20,000 Job losses in the City of London as a result of the credit crunch

£150 Average monthly mortgage rise because of banks increasing interest rates

3 million Estimated number of households that will see their mortgage payments increase this year

1.4 million Borrowers will come to the end of their fixed-rate mortgage this year and face steep payment increases

£7,500 The average deposit now required for first-time buyers to get on to the housing ladder

$1 trillion IMF estimate of the total cost of the credit crunch

$40 billon Credit crunch banking losses so far

Not looking so rosy now is it?

BTW, the HSBC "like for like" mortgage that was in the newspapers definately has arangement fees.

Obviously my big hug in an earlier post didn't help brighten up your day.

Have another

Infact, have two

Malkie, examples and names of banks please, if you would.

Already have. HSBC (by my quick scouting around) does the best deals.

You are starting to increasingly sound as if you are a man with something to lose, like a rather large BTL portfolio... Please tell me I am wrong

You are wrong. Only got the one mortgage, never really been fussed about BTL type stuff - always seemed like too much hassle for not enough return.

I'm just being realistic, rather than yourself who is clearly foaming at the mouth regarding media speculation. Remember, the media makes money by selling newspapers etc so obviously they fuel propaganda and hype to sell more media.

BTW, the HSBC "like for like" mortgage that was in the newspapers definately has arangement fees

Only for new customers, and only a few hundred quid. However, I'm confident they'll wave the fee to get business if you are a safe bet customer.

It's honestly amazing they deals the bank will give if you haggle.

So, a question for you - why are you so bitter?

come on Pflusk, cheer up

I still think if you didn't stretch yourself in the first place and you have kept on top of your finances and paid your mortgage like you were expected to, the banks are not going to clamp down their doors.

Banks, and they are justified in this even if they weren't so scrupulous in years gone buy, want dependable proven people to lend to now. If you're sensible with your priorities right, you're fine and they will see that, this is what I'm clinging to.

But people who remortgages up to the hilt to buy a big needless caravan to use two times a year and have takeaways every night and a new car when it wasn't needed just to show off, deserve everything they get yes, that's you mr's workmate.

quote:

It's honestly amazing they deals the bank will give if you haggle.

So, a question for you - why are you so bitter?

Perhaps he's not in a position to haggle?

quote:

I'm just being realistic, rather than yourself who is clearly foaming at the mouth regarding media speculation. Remember, the media makes money by selling newspapers etc so obviously they fuel propaganda and hype to sell more media.

Hmm, so:

quote:

The big numbers

45,000 Estimated repossessions likely this year – up 50 per cent

20,000 Job losses in the City of London as a result of the credit crunch

£150 Average monthly mortgage rise because of banks increasing interest rates

3 million Estimated number of households that will see their mortgage payments increase this year

1.4 million Borrowers will come to the end of their fixed-rate mortgage this year and face steep payment increases

£7,500 The average deposit now required for first-time buyers to get on to the housing ladder

$1 trillion IMF estimate of the total cost of the credit crunch

$40 billon Credit crunch banking losses so far

comes under "Propaganda" does it? Because it looks like fact to me. I love all this talking the market down crud. It cant happen, wont happen. The market will fall like a rock because the fundamentals are skewed. Prices are too high and will fall.

Lets see how many think "rent is dead money" and "I missed the boat" back in 2005 now I have a 30% deposit on my likely first home.

Oh, the HSBC loan also required 85% LTV, which doesnt help anyone that sadly finds themselves underwater on their loan, due to reckless lending practices in recent years.

quote:

Perhaps he's not in a position to haggle?

I will be, when homeowners are screaming for mercy!

come on Malkie, give me a big hug

You didn't answer my question - why are you so bitter?

£150 Average monthly mortgage rise because of banks increasing interest rates

Interest rates are going down, not up.

3 million Estimated number of households that will see their mortgage payments increase this year

Only if they don't shop around or don't haggle.

1.4 million Borrowers will come to the end of their fixed-rate mortgage this year and face steep payment increases

See above.

Lets see how many think "rent is dead money" and "I missed the boat" back in 2005 now I have a 30% deposit on my likely first home.

Had you bought your likely first home in 2005 with a 100% mortgage the value of your home would currently be approximately 30% higher than you paid, *and* a further ~10% of the equity paid off.

I guess you said in 2005 that there would be a crash in 2006 so you'd wait until then. It didn't happen, but you *knew* it would in 2007, so decided to wait until then. It didn't happen in 2007, so I guess it totally must 100% happen in 2008, and it obviously will be greater than the 40% value that you'd currently be at had you bough a house in 2005.

You've been had mate.

quote:

Interest rates are going down, not up.

Malkie, you show your lack of understanding of finance. Mortgage rates have decoupled from base rates as LIBOR is increasing, not decreasing. Rates wont be coming down due to this: Quote times:

quote:

Manufacturers' costs rose by a record 20.4 per cent in March while factory gate prices spiked at a 17-year high.

According to the Office for National Statistics (ONS), the output price index rose by 6.2 per cent in the 12 months to March — the highest since May 1991.

Ever heard of inflation? The BOE's sole remit is to control it, not to pander to property speculators. LIBOR has increased since the last rate cut.

quote:

Only if they don't shop around or don't haggle.

What happens if they are underwater on their mortgage and cant refinance because no-one will lend at plus 100% LTV? Stuck on the SVR which means they will face a massive increase from the 4.5% typically they would have siged up to to the SVR (base + 1% typical), which, lets face it, isnt insignificant. Those that can remortgage will still face the SVR, at around 5.5%+, at a time that "money is too tight to mention".

quote:

Had you bought your likely first home in 2005 with a 100% mortgage the value of your home would currently be approximately 30% higher than you paid, *and* a further ~10% of the equity paid off.

Wrong. You would have paid back 6.7% of the principal, the 30% is a gross increase, which would equate to 24% in real terms. I have managed to save in that time, funny old thing, around 30% of the principal I would have signed up for. IF prices now fall 30% (as predicted by the IMF, Capital Economics and a whole host of of others that dont have vested interests in the property market) I not only gain from the savings I have made as a deposit, but also would have not been frittering it away in interest payments to the bank. Any decrease increases the % of my deposit. This is the whole point of what I have been pushing here since 2005, renting is NOT dead money, the property market is now correcting (I have a bet on this site we will see 25% declines by 2010, by which stage I will have saved a further 30% on my deposit). Now tell me I have missed the boat...

quote:

I guess you said in 2005 that there would be a crash in 2006 so you'd wait until then. It didn't happen, but you *knew* it would in 2007, so decided to wait until then. It didn't happen in 2007, so I guess it totally must 100% happen in 2008, and it obviously will be greater than the 40% value that you'd currently be at had you bough a house in 2005.

I never called the top in 2005,2006, I called it in 2007. MAny others have subsequently done the same, you can refer back to my posts later last year when I said as much, or early on this year when ANY decline in prices was still being laughed off as ludicrous.

so why are you so bitter - still dodging that question I see

Rates wont be coming down due to this

HSBC have already reduced their rates on fixed deals following last weeks drop in base-rate. You are basically making things up now to suit your arguement. Same goes for the 85% LTV from the HSBC you plucked out of the sky. It's 90% for most people, 95% for others. However, I must stress again that all of that is open to negotiation if you've got the ability and standing with the bank.

What happens if they are underwater on their mortgage and cant refinance because no-one will lend at plus 100% LTV?

What happens if aliens invade and buy all of the spare property - should we plan for the utterly ridiculous as well as the totally ridiculous? As each passing month goes past the equity reduces, so even if there was a marginal drop you'd still be way below the LTV.

IF prices now fall 30%



I guess I know why your bitter - you've gambled on cashing in on other peoples misfortune, which is pretty low if you ask me. I'm assuming you are bitter because it hasn't paid off, and you are still stuck in the same situation as you were in 2005, whereas those of us who took the safe gamble that property prices always increase are looking at huge increases in our investments.

I'm not looking to make money from my home - it bought it to live in, and enjoy security in retirement. I guess by then you'll be claiming that the crash i