fixed interest rates are very good in one way, you know what your outgoing is going to be for X years, and that can be very useful. Be wary about fixing for short periods though, as the fees involved with switching deals when the fixed rate expires can rapidly outweigh the benefits of fixing on 2 years deals.

I thought about fixed as you do know exactly what is going out every month. Ive been recommended fixed from other friends/family as well, as it will give me more security knowing what is going out each month.

So getting a fixed, youd recommend it over at least 3 years?

Evilsly, eople have been predicting house price drops for years. Each year it doesnt happen and they predict it again for next year.

House prices are safe in the UK in the long term - why ? - becase we are a tiny overpopulated island and no one is making anymore land.

Thats not to say they will continue rising at record levels, and of course they can dip temporarily. But houses have always beaten inflation in the long term.

So really you guys wouldnt even think about a fixed mortgage?? I only was for the added security..........as surely there is a chance....all be it small, but the interest rate could sore couldnt it.

My first house I fixed the mortgage for 5 years as the interest rates were lower and only likely to go up (which they did).

However rates are now high and theyve dropped fixed term mortgages substantially so its pretty hard to go above 2 years fixed.  Even if interest rates maxed out and increased by quarter of a percent 4 times in each year thats only 2% over the total time.  Thats about the difference between variable and fixed anyway.  Regardless - if interest rates went up more than about 1% the country would be in huge problems long before you notice the effect on your mortgage.  The choice to raise interest rates is exacty that - its a choice to stop us spending.  The government wont push it much higher than it is now simply because too many people would become homeless or take on runaway debt.  Personally Id allow for qa 1% rise if you go variable and then be either prepared or pleasently suprised.  If the varible rate is 1% less than the fixed rate then what do you care?

Fixed rate mortgages were great 3+ years ago - right now I wouldnt bother other than the simplicity element of it being exactly one amount every month.


I dont believe the housing bubble line - Ive heard it constantly for the last 8 years.  Were building less houses than we need every year.  I think were just in a situation where the difference between starting salaries and retirement salaries are so different that house prices dont have to scale with income.  I think Evils totally right in not expecting to make stellar profits anymore from single houses but you have to live somewhere and paying off a mortgage is a much better idea than playing rent for nothing.

If you want to buy lots of houses and do it properly as an investment youre laughing too.  Rent scales with house prices.  More people with disposable income cant afford to buy than ever before, etc.


RE: the Northern Rock - Ive not known anyone be required to pay a £2k arrangement fee!  I think mine were free and then £200.  The reason people recommend the northern Rock is because they do high risk mortgages like multiple owners, buy to lets, first time buyers, high income multiples etc.  Not checked them out since they revamped their lineup but they were about the best 6 months ago.

I disagree with SteveF on the idea of renting out property. Anyone building a house now to rent out (as opposed to someone who bought one when they were cheaper) will be beaten in any scenario of oversupply by the new trend of build to let.

House prices arent sustainable. The bubble will burst, but I dont see a crash, just less people moving... simply because they cant afford to move as there could be to much negative equity about.

Basically, Interest rates dropped after 9/11 to 3%. This gave people more disposable income & many sold up & moved to a better area or bigger house, etc. Demand has pushed the prices through the ceiling.
Where I live, if your single & earn less than £25k a year, you can forget about buying.
Its squeezing the single people out of the market & putting a lot of financial pressure on 1st time couples buying together.

Probably like most people on here over 25, Dad brought home the Dough & Mum looked after the house & bring the kids up..
Those days have all but long gone now....


Anyway, on another Note.
WG you will get a better deal if you can raise 5% deposit.
What was normal practice years ago was to make an offer & then say theres a 5% gift or deposit paid, etc. - Its now kind of frowned upon & Illegal without the agreement of the seller.. but throw the seller a cash handshake of £200 & your usually sorted.

My latest property was up £90k... 5% = £4500
I paid £89k for the property.
Mortgage is £84k.. Then I had my 5% "gift" back... affectively meaning I paid £84k for the property ;-D

yeah you kind of need to be in property already for renting.  At a certain point you become immune t it all anyway as varying interest rates and house prices just change when you buy and when you remortgage (Im not there yet).


The problem with asking family and friends about mortgages is theyre all basing their knowledge on a couple of years back.  Almost everyone who hasnt bought in the last year or two is going to say you ust get fixed rate for a first purchase.  With interest rates at the level theyre at now and the short terms you can get its just not worth it.  But theyll all tell you that because it made sense up until recently.

I always start with any new properties on Interest only. Gives a bit of breathing space for any work that needs to be done, light furnishings, etc.
Then when your discount/tie in is up, shop around & go for a fixed rate.

My last purchase (which is the one I do plan on moving to & renting out the current pad) as I said cost £85k. It needs a lot of work. Im estimating £15k - for that Ill be converting the Loft into a usable storage area with permanent access, removing 5x Chimney Breasts & its Stacks, etc. Replastering the whole house, decorating the whole house, Move Old Central heating boiler from upstairs & install a new combi downstairs, Landscape the back garden & build a Garage & Finally to Render the whole house as its plain red brick atm. Thats the 3yr plan.
Smaller Houses are already selling in the street for £95k. Its a big house (3reception rooms, 4 bedrooms) & theres a growing sub-indian continent community after some foreign investment.
Should push the price up to around £120k by then of 3 years. 50% equity.
Thatll be me done then.. I could then sell up & retire to Malaysia or Thailand.

Figure Ill have enough money to last me about 30years taking in account the rent money from the other gaff.

Then I just sell the 2nd property which should last me the rest of my life mixed in with my pension

to give the other side of the story

I have somewhat of a vested interest

between ms evilsly and myself we own 4 properties, outright, no mortgages.

we are currently trying to sell one of them, priced it below market rate, and its a nice house, and the market is DEAD. very little interest in 6 weeks, even after dropping the price.

we are also looking to buy a new property locally here, and Ive been tracking a lot of local property in the 125k range (which is above average for here), and again, its dead. Ive been tracking 74 properties to see what they sell for etc, and only 3 have offers, no sales completed, in 2 months.

property might be booming in London, but its a different story in other areas.