Key Post: How much can I borrow?

[TheBigD]

What % of your after tax salary will be consumed by your mortgage payment?

<40%

What is the interest rate on the mortgage?

3.1%

What % of your after tax salary will be consumed if interest rates rise by 2%?

I'm fixed for a long term so a rise in interest rates won't impact me.

I would have thought that if people had learned anything out of this it's that just because the banks are offering you the money doesn't mean it's a good idea - for either of you.

As I've said. I've done the sums and it's affordable for me. I'm taking advantage of low interest rates and fixing in now. I'm buying a home, not an investment so negative equity is not a factor.

But you'll still tell me I'm wrong I'm sure!

 

[Mr DT]

I'm buying a home, not an investment so negative equity is not a factor.

But you'll still tell me I'm wrong I'm sure!

Buying a home, not an investment, doesn't mean that negative equity is not a factor.

Negative equity is a factor for everyone in it, or potentially in it, even if it is a home.

Why? Well it limits mobility if you NEED to move home.
It also means you have borrowed more on your home than you needed to. What could that additional money have been spent on?

In effect because you have overpaid you have reduced yr disposable income for the period of the mortgage, which could have a direct impact on your quality of life!!


People who say "r negative equity, so what! I'm in my home forever" are just justifying that they have over paid. But thats human nature we always try and justify our actions

 

[pinkie123]

Mr.DT, people don't overpay for houses cos they wanted to. If we all had a crystal ball, well. Maybe they are saying negative equity dosen't bother them because they DO love their home, and have better things to do than lying in bed at night worrying about negative equity. Maybe they are getting a life.