@Bran
The way you have phrased it makes it sound like the entire mortgage is 10 years. That is incredibly short and not normal in the UK.
Devi said:
@Bran
The way you have phrased it makes it sound like the entire mortgage is 10 years. That is incredibly short and not normal in the UK.
That’s not what I meant, I meant a 10-year fix, I just got bored of repeating the word “fix” and thought people would be able to interpret what I meant.
@Bran
I know what you meant, but the person who replied to you clearly didn’t.
@Bran
Do you have starter homes in the UK? By that, I mean modestly priced homes that are affordable for people early in their career, in the lower middle class?
We used to have them in the US, but they were all bought by investors who now rent them out to people who can’t afford to buy.
@Kim
It’s the same in much of the UK (and the world honestly).
Fin said:
@Kim
It’s the same in much of the UK (and the world honestly).
I can’t imagine paying for an entire house over such a short period of time. I’m incredibly lucky- I bought a starter home in 2013, sold it for double the price in 2021, and that allowed me to buy a bigger house without a bigger mortgage payment since I put so much down on the purchase. It looks like the value of my current house has appreciated a great deal since I bought it.
I hate that other people don’t have that opportunity today.
@Kim
It’s challenging when the market dynamics do not favor first-time buyers or those with limited financial means.
@Kim
It’s a concern in many regions where housing affordability is becoming increasingly difficult.
@Bran
Thanks for clarifying! It’s helpful to understand how mortgage terms vary.
@Brooke
That’s an interesting comparison between different mortgage systems.
Jamie said:
Your mortgage is the same. Your taxes and/or insurance went up
Some people roll the dice and go with an adjustable rate…
I did just that in the 1980s when the fixed 30 year was 18%
@Rye
I remember those days. We bought our first home in 1986 when the rate dropped to 10%.
Miller said:
@Rye
I remember those days. We bought our first home in 1986 when the rate dropped to 10%.
It’s great to hear stories from different times and how the housing market has changed!
@Rye
I bought in 89 and got very, very lucky with a fixed 9%
Folks said I’d win the lottery with my luck. They were wrong about that.
@Rye
It’s fascinating to hear how much mortgage rates have fluctuated over the decades!
Jamie said:
Your mortgage is the same. Your taxes and/or insurance went up
Some people roll the dice and go with an adjustable rate…
Or just like OP is saying your mortgage can go up due to taxes and insurance even if you’re on a fixed rate, which was the point that many seem to be missing here. Both are included in most’s mortgage via an escrow account which is required by many lenders
I have a 2.9% fixed and yet my mortgage went from $1,405/month to $1,629 this year due to both taxes and insurance increasing. This has nothing to do with adjustable rates
Jamie said:
Your mortgage is the same. Your taxes and/or insurance went up
Some people roll the dice and go with an adjustable rate…
Serious question - why would someone agree to an adjustable rate mortgage?
@Weston
There’s a banking product called a heloc that essentially lets you spend money from the equity on your home. It’s also known as a second mortgage. These are always sold as adjustable rate to the best of my knowledge.
People use them to purchase vehicles, land, or really anything they would like.
As a primary mortgage I’m not sure why someone would choose that. I’ve heard it’s good for home flippers that intend to sell somewhat quickly. Maybe adjustable rate has lower lending standards too.
@Blane
It’s good for anyone willing to gamble that one or more of the following is true:
- Rates will come down (and they will refinance)
- They won’t live there longer than the fixed-rate period
- They will pay it off prior to the end of the fixed-rate period
@Weston
Adjustable rate mortgages can offer lower initial rates, which might be attractive to some buyers, especially those who plan to move or refinance before the rate adjusts.