This reality isnt made clear in the application process, they borrow on past performance of your savings and salaries.
A couple of things to bear in mind.
Until last August, mortgage lenders were required to stress test borrowers to check they could continue to repay in the event of a three percentage point increase in rates - that rule at least used to act as a check on people getting completely caught out by rising rates on a go-forward basis.
The other thing to remember is that (abstracting from wider rate changes) your mortgage rate ought to come down over time as you remortgage, as your loan-to-value ratio will improve each month because of your repayments. In a rising rate environment, that at least gives some offset to the rate increases. I’m coming to the end of a 5yr fix but my LTV bracket has improved enough over that period that my monthly mortgage payments ought not to increase horrifically if I do remortgage for another 5yrs.
I expect to go 5yr again because I know I can afford it and I’m risk averse.
Paying up for a 2yr fix now followed by a cheaper 3yr fix when it expires might work out cheaper overall (if rates do come down in 2025/6 as people expect) but there’s enough uncertainty in the economy/politics/geopolitics that I’d prefer not to take the chance.
Mine 5 yr fix ends in early 2027, I think if rates are still high I’ll only fix for 2 years next time, it’s a dice roll but I think eventually we will stabilise around 3-3.5% base rate
Yeah, it’s complicated. It’s about friendships, it’s about jobs, it’s about nightlife and events and transport, …
I work for a big tech employer in Coventry. We’d be very happy if some of the London/South-East based employees wanted to move here. And we’re within easy commuting distance of a number of towns and villages as well as the city itself. And we’re only an hour from London on the train - hardly the back of beyond.
If people actually want to move, it is perfectly possible for them to do so right now. If they don’t, for any one of a number of reasons, it is their choice. But it is very naive to imagine that Government subsidies would help when simple economics already provides a subsidy worth hundreds of thousands of pounds.
My employers office is in London, I visit a few times a month and the rest of the time I work at home in the northwest. Really hit the jackpot of jobs for myself. 1hr 47mins to London on the west coast mainline. When I visit I can get the 6.30am train and be at the office before 9
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A couple of things to bear in mind.
Until last August, mortgage lenders were required to stress test borrowers to check they could continue to repay in the event of a three percentage point increase in rates - that rule at least used to act as a check on people getting completely caught out by rising rates on a go-forward basis.
The other thing to remember is that (abstracting from wider rate changes) your mortgage rate ought to come down over time as you remortgage, as your loan-to-value ratio will improve each month because of your repayments. In a rising rate environment, that at least gives some offset to the rate increases. I’m coming to the end of a 5yr fix but my LTV bracket has improved enough over that period that my monthly mortgage payments ought not to increase horrifically if I do remortgage for another 5yrs.
deleted by creator
I expect to go 5yr again because I know I can afford it and I’m risk averse.
Paying up for a 2yr fix now followed by a cheaper 3yr fix when it expires might work out cheaper overall (if rates do come down in 2025/6 as people expect) but there’s enough uncertainty in the economy/politics/geopolitics that I’d prefer not to take the chance.
Mine 5 yr fix ends in early 2027, I think if rates are still high I’ll only fix for 2 years next time, it’s a dice roll but I think eventually we will stabilise around 3-3.5% base rate
There are massive incentives to move. You can get the same house for less than half the price of a London house all over the country.
If that vast financial incentive doesn’t make people move out of London then Government subsidies never will.
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Yeah, it’s complicated. It’s about friendships, it’s about jobs, it’s about nightlife and events and transport, …
I work for a big tech employer in Coventry. We’d be very happy if some of the London/South-East based employees wanted to move here. And we’re within easy commuting distance of a number of towns and villages as well as the city itself. And we’re only an hour from London on the train - hardly the back of beyond.
If people actually want to move, it is perfectly possible for them to do so right now. If they don’t, for any one of a number of reasons, it is their choice. But it is very naive to imagine that Government subsidies would help when simple economics already provides a subsidy worth hundreds of thousands of pounds.
deleted by creator
My employers office is in London, I visit a few times a month and the rest of the time I work at home in the northwest. Really hit the jackpot of jobs for myself. 1hr 47mins to London on the west coast mainline. When I visit I can get the 6.30am train and be at the office before 9