Anyone care to speculate on the mortgage situation next summer? I'm losing my mind with worry

[anotherklutz]

@cierrahopes I'm not sure to be honest, other houses in my street are at maybe 190k now during recent sales but the market is supposed to crash next year so I didn't think that factor counted? Also, a lot of lenders seem to be saying they'll take the lower option of current market value or the price you paid to calculate LTV which makes me a bit frightened to go for revaluation if things are looking bad.

 

[spelunker11]

@anotherklutz

the market is supposed to crash next year

Damn where was this announced OP?

 

[kimt]

@anotherklutz You could get in touch with your mortgage provider and ask them to explain the values they use to work out your LTV?

When I log into my mortgage provider's website, I can see the LTV they have calculated for me - although I can't see the house price value they used to work it out. My LTV changed recently so I got in touch and they explained that they estimated my house price had gone up since last year based on national trends.

 

[aylynfaith]

@anotherklutz Housing crash is not a given either, houses may slow and dip slightly, but a crash like 2008 is unlikely at the moment.

You have been listening to too much fear mongering.

 

[tobyheath94101]

@anotherklutz You're in a good position with £8k saved. I suggest you stop overpaying £100 into your mortgage and add that to your savings over the next year. If you open a Barclays blue rewards account you can get 5% interest and you can get 2.75% on the money you have above £5k in a notice savings account.

Also set up a budget and see if you can save more than the £100 a month.

That way you'll have more cash and flexibility when your mortgage rate ends. If rates are high, at that point you can put a larger sum into your mortgage to reduce the amount you owe.

 

[anotherklutz]

@tobyheath94101 !thanks
I've always been a budgeting type of person but things have been rough over the last few months so I intend on getting back onto that, especially once my pay rise comes in soon ish. I can probably save around £500 p/m at the moment between both me and my partner working together and stopping the overpayment.

 

[tobyheath94101]

@anotherklutz If you can save £500/month, you'll have another £4-5k in your savings next summer which is amazing. You're definitely in a stronger position than most.

 

[kansas22]

@tobyheath94101 How much interest would you get a month in your account for £5,000 at 5%?

 

[tobyheath94101]

@kansas22 About £21

 

[kansas22]

@tobyheath94101 How do you work it out?

 

[tobyheath94101]

@kansas22 In a calculator 5000 X 0.05 ÷ 12

 

[tobyheath94101]

@kansas22 Your new name is 290Poory

 

[michael55]

@anotherklutz I’m no economist but if rates go to 15% then the whole UK economy will crash and burn and every home owner will be in the same boat as you. Don’t listen to the alarmist articles, sit tight and ride it out is what I would say.

 

[blhchristina]

@michael55 Let's be honest, that would happen way before 15%.

 

[michael55]

@blhchristina Definitely. I can’t see the rates going higher than 8 or 9 %

 

[blhchristina]

@michael55 I assume you mean combined? As a base rate of that would also be unaffordable for most.

 

[michael55]

@blhchristina Whatever the number is, they won’t let it become unaffordable for most.

 

[randybonnette]

@anotherklutz It's time to chill out.

Ease off getting information from low quality sources like social media, tabloid papers and clickbait internet articles. It's easy to worry yourself sick if you are feeding your brain with bilge. Sensationalist stories get lots of clicks and shares.

It's best to chill out and not pay too much attention to the hyperbolic nonsense. If you want news get it from a quality source that is relatively neutral and doesn't try to whip people up to get clicks. Like The Financial Times or the Times.

Interest rates are not going up to 16% any time soon. There are a whole number of reasons why this is different to the 1980s.

By the way - what think happened to the wealth of people who owned houses in the 1980s and lived through 16% interest rates? Many of them are property millionaires. The baby boomers are the wealthiest generation in human history. People who bought in the 70s/80s typically made more wealth from owning a house than they did for working their job. If we are moving into an era of high interest rates that also means high inflation which means house price rises that would bring your LTV right down. Maybe not in the short term, but certainly over the long term.

High inflation also means high pay rises: people were getting 10%+ pay rises each year in the 80s. Don't assume your salary will remain static.