Affordability Tests

[jowwy]

is the right thing to be doing right now

https://www.bbc.co.uk/news/business-62353114

 

[fossyant]

It's one thing we did 27 years ago was see if we could afford the mortgage at 12 percent plus as they'd been that rate previously. We could have just about managed. I suppose you've got to test those assumption's yourself, as the rates have been pretty low.

 

[Milkfloat]

Is this not a NACA topic?

 

[jowwy]

Is this not a NACA topic?

its a money topic....its governed by the bank of england and not westminster, nothing politcial in the decision made by the bank of england. Its about how banks lend for mortgages and whether people can afford to pay it back.

 

[Joffey]

I suppose it's a good thing and a bad thing at the same time.

Hopefully it will prevent people on low fixed being stuck on the variable rate when their deals end.

 

[Alex321]

I suppose it's a good thing and a bad thing at the same time.

Hopefully it will prevent people on low fixed being stuck on the variable rate when their deals end.

How would it do that?

It changes how people are assessed when first applying for a mortgage, it doesn't affect what deals your mortgage provider may offer when you come to the end of a fixed term.

 

[Joffey]

How would it do that?

It changes how people are assessed when first applying for a mortgage, it doesn't affect what deals your mortgage provider may offer when you come to the end of a fixed term.

Mortgage Prisoners

Your current provider may not give you the best deal so when you apply with another company you fail the affordability criteria despite being able to show you are already meeting the payments on a higher interest rate.

 

[wafter]

It's the right thing to do for those who have a vested interest in propping up ridiculous house prices in the short term..

 

[midlife]

I gather there will still be a cap on how much you can borrow.

 

[gbb]

I guess there is, and always was an appetite to buy whatever the risk.
I remember arranging my then very insubstantial mortgage, I was still wary, nervous, u sure, tried to factor in a safety net etc etc. I remember saying to the lady at the building society...'how on earth do people take on mortgages 4, 6 times more than what I'm paying ?'
Her actual words were...'they just gulp and sign...and hope for the best

Those worrying costs at first diminish...assuming everything stays pretty much the same..
Pay ridiculous rental costs or plunge into buying your own....neither is without its uncertainty. Long term everyone knows buying is the right thing to do...its just a gamble you have to take.