punkypossum
Donut Devil
- Location
- My own little planet...
I know we had a similar thread recently, but I'm looking seriously getting out of my rented flat and buying a property and this whole mortgage business is confusing me greatly!
However, I've been playing around with the figures, and looking at the pretty standard mortages of about 4 times my salary with a 25% deposit, I could afford a mortgage now, fixed at 4.something percent. However, after playing around with worst case scenarios, including 15% interest rates which we apparently had in the early nineties, and a more likely scenario of 7.5% percent, which is probably more realistic, there is no way I could afford 15% and in fact I don't think 7.5% would be sustainable over a longer period of time either. This brought me to the rather dissappointing conclusion that I can't afford a house after all, unless I find one that would mean a smaller mortgage or I win the Lidl £50,000 price draw. Neither are likely, but what I can't get my head round is how other people do it! The 4 times your salary mortgage appears to be pretty much the norm, so surely everybody would end up in a situation where they can't afford the repayments anymore once the rates go up - especially at the lower end of the market where people have to count the pennies more anyway and where there is only one income. So how come houses don't constantly get reposessed? I don't get it!!!
However, I've been playing around with the figures, and looking at the pretty standard mortages of about 4 times my salary with a 25% deposit, I could afford a mortgage now, fixed at 4.something percent. However, after playing around with worst case scenarios, including 15% interest rates which we apparently had in the early nineties, and a more likely scenario of 7.5% percent, which is probably more realistic, there is no way I could afford 15% and in fact I don't think 7.5% would be sustainable over a longer period of time either. This brought me to the rather dissappointing conclusion that I can't afford a house after all, unless I find one that would mean a smaller mortgage or I win the Lidl £50,000 price draw. Neither are likely, but what I can't get my head round is how other people do it! The 4 times your salary mortgage appears to be pretty much the norm, so surely everybody would end up in a situation where they can't afford the repayments anymore once the rates go up - especially at the lower end of the market where people have to count the pennies more anyway and where there is only one income. So how come houses don't constantly get reposessed? I don't get it!!!