What expenses are there owning a home?

athtrasna

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Folks can we get back on topic please. A very specific question was asked by the op.

Thanks

CiniO

SarahMollie wrote: »

Just to put this in perspective. My parents bought our family home in the mid 80's for about £60k. That was a lot at the time.

They paid off the mortage years ago, and I remember my dad saying that towards the end, the mortgage was probably the cheapest monthly bill. They've owned it outright for about 15 years now.

There is currently a similar house on the same street asking around €1m. They achieved more than €1.7m in Celtic Tiger times.

1. By the time they'd have saved £60k - that house would have cost a lot more.
2. They have a (very valuable) asset once the mortgage is paid.

They don't have to worry about having a roof over their heads in old age, so whatever they spent on servicing that mortgage was well worth it IMO.

Yes, but that's all due to fact than since your parents bought the house until time they repaid mortgage, house prices has risen big multiple times, and salaries has risen multiple times as well.

Someone else earning €80k in 2007, who purchased €600k house, is probably is big trouble over recent years, assuming his house is now worth €250 and he only makes €50k now. And mortgage repayments didn't go down for him at all.

SarahMollie

CiniO wrote: »

Yes, but that's all due to fact than since your parents bought the house until time they repaid mortgage, house prices has risen big multiple times, and salaries has risen multiple times as well.

Someone else earning €80k in 2007, who purchased €600k house, is probably is big trouble over recent years, assuming his house is now worth €250 and he only makes €50k now. And mortgage repayments didn't go down for him at all.

Actually, if they're on a tracker mortgage (which a lot of ppl from that timeframe are) then yes, their mortgage payments are likely a lot less in the last few years.

Also, the example I gave is over the lifetime of a mortgage. 2007 is only 9 years ago and it was an extraordinary event. Assuming a standard mortgage term of 30 years, prices will likely go up and down in that period. Its only where you stand at the end that counts.

Property markets are cyclical. Thats normal. What changes is that as people progress in their careers, they get promoted and earn more money. Then the % of their income needed to service the mortgage is less and less.

I'm of the age where I have some friends and colleagues with boom time mortgages. Yes the principle sum they borrowed doesnt match what the house is worth, but in many cases the repayments are way lower than what you'd pay on a similar loan amount today, and hence are still affordable.

athtrasna

Thread closed as the mod note hasn't worked.

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