Mortgage Repayments

[CharlieC]

I moved house last year and started making repayments in July 2005.
At the time I felt that I was worried I was stretching myself but was happy to get into a good area. I would consider that both my wife and I have above average salaries. To buy the same house 8 months later under the same mortgage conditions- term rate etc would equate to 700 euro extra per month.

Where are people getting the money from?

 

[beattie]

On the business section of the Dunphy radio show this morning he alluded to the case wherby on bank (Northern Trust It think) had given a particular customer a 100% morgtage and 10x salary. Ridiculous

 

[Glenbhoy]

On the business section of the Dunphy radio show this morning he alluded to the case wherby on bank (Northern Trust It think) had given a particular customer a 100% morgtage and 10x salary. Ridiculous

Having read the actual story, it's normal sensationalist media nonsense. Firstly, the customer was going through a divorce and had a large settlement coming.
Secondly the customer had a business relationship with the bank, this may mean many things, but essentially shows that the customer is someone whom the bank have been dealing with over a number of years and they are obviously very satisfied with that persons trustworthiness and more importantly their net worth.

Where are people getting the money from?

Indeed, something I ponder deeply every day, my theory thusfar is that it's coming from equity built up on the home they've traded up from. There is also the issue of parental gifts, as parents are the wealthy peoples now, there is undoubtedly a tendency for them to dole out large amounts to their kids to help them get a foot on the ladder.
But all that aside, you are right, it is amazing - you would'nt want to have any kids on top of that mortgage either.
To yourself Charlie, do you feel that interest rate hikes have/will (presuming they continue on their .25% every 3 months trend) made much of a difference? And if not, when do you feel they may have?

 

[asdfg]

I think this was from the north. The person in question was expecting a divorce settlement shortly so I suppose a large portion of the loan will be paid back.

Post crossed with Glenbhoy

 

[CharlieC]

To yourself Charlie, do you feel that interest rate hikes have/will (presuming they continue on their .25% every 3 months trend) made much of a difference? And if not, when do you feel they may have?

Glenbhoy- To be honest I haven't really looked into that much as I fixed for a year. Using www.propertyfile.net/tools.htm A .5% int rate rise will mean 114 per month extra to me. To the people buying now as per my original post it would mean approx 150 extra. Not a huge difference.
The initial mortgage needed is the killer

 

[bearishbull]

wherever the moneys coming from theres only so much that people can raise, incomes are only rising by 4.5% while prices are rising by 2,3,4times this amount,this is completley unsutainable,these large rises per year are just rapidly bringing us closer to the limits of affordability for first time buyers and young buyers . when banks cant increase term and loan amount any more prices will have to stop rising and the shock of them not rising could trigger a downward spiral.