Calina said:You have got to be joking me? People were spending 600K plus in Collinswood?
StoppedClock said:I'm lovin' the sentiment but just before I start making smug phone calls and marching around the office yelling "I told you so" can you please confirm that we have peaked and that the crash is currently underway?
CelloPoint said:That's another good point. Can't remember where I saw it (boards.ie or here on AAM), but is there any evidence that the banks are not passing on the rises to their customers? If this is the case, the Irish banks are basically giving 2 fingers to the ECB, and it's like saying "to hell with the long-term future of the Irish economy, we're going to milk the tiger for every last drop of blood" and "we know better than the ECB".
Actually its more of a problem in Ireland where vast majority are variable or semi variable(fixed for a few years only). Banks stress test at prevailing mortgage rate +2% ,so where theres loads of variable mortgages the higher rates go the more people are affected by reduced borrowing capacity. If majority are on long term fixed terms then the stress test isnt required.whathome said:That is because US buyers generally lock rates for the total duration of their mortgage. Variable (adjustable) rate mortgages (ARM's) are a recent arrival to the US market. So people rush to lock in a low rate. Variable rates are dominant in Ireland so the "race against rates" is less likely to have as much of an effect here.
bearishbull said:Actually its more of a problem in Ireland where vast majority are variable or semi variable(fixed for a few years only). Banks stress test at prevailing mortgage rate +2% ,so where theres loads of variable mortgages the higher rates go the more people are affected by reduced borrowing capacity. If majority are on long term fixed terms then the stress test isnt required.
Duplex said:negative equity may be a reality (if unidentified) for many recent buyers.
Duplex said:negative equity may be a reality (if unidentified) for many recent buyers.
summerhill said:Any of the bank's passed on the latest interest rate increase to mortgage holders yet??? Any indication as to when it will happen?
Long term Mortgage rates in America never went below approx 5.5%,even when variable rates were ultra low most americans were fixing into long term rates at 5.5%. For several reasons it does have a bigger effect here and race against rates didnt exist to a large extent in the usa.whathome said:The effect of the stress test is neutral. Rates go higher, stress test goes higher by the same amount. Agreed that there will be a few crazies that will try to borrow in case their approval drops.
If you were locking your mortgage rate for 30 years, would you wait for rates to rise before buying? This is the position for many US buyers, the race against rates has more of an effect over there.
Both, but mainly with regard to borrowing capacity, rates rise and you can borrow less,but when majority of market is fixed theres less of a race to get in before rates rise whereas where the majority are variable(as in ireland) there is a race to get in before a)rates rise to unaffordable levels and b) the amount you can borrow at a set income level is reduced due to higher rates.StoppedClock said:bearishBull please claify your understanding of race against rates.
Do you mean people trying to lock in lower fixed rates or borrow larger amounts?
bearishbull said:Long term Mortgage rates in America never went below approx 5.5%,even when variable rates were ultra low most americans were fixing into long term rates at 5.5%. For several reasons it does have a bigger effect here and race against rates didnt exist to a large extent in the usa.
bearishbull said:amount you can borrow at a set income level is reduced due to higher rates.
StoppedClock said:Are people really that stupid that they cannot see the link betwen higher lending amounts and higher prices and inversely lower lending amounts and lower prices?
whathome said:The 30 Year FRM (Fixed Rate Mortgage) in the US dropped from 6.5% in Sep '03 down to 5.5% in Feb '05. Current average is 6.63%. There was a rush to lock at the lower 5.5% to 6% range.
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Fools and their money.whathome said:It sounds crazy but I suspect a minority are that stupid.
bearishbull said:Yeah but its not as significant as here. 5.5% is only 15% less than 6.6%.
bearishbull said:5.5% is only 15% less than 6.6%
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