RH33 Posted October 30, 2021 Share Posted October 30, 2021 4 hours ago, UsedToGoToCentralPark said: 5 hours ago, oaksoft said: Had a wee Google and apparently the average UK mortgage is £140k. I feel sick just thinking about having that level of debt. No wonder the Bank of England is reluctant to raise interest rates back to historically normal levels of 5%. It was always the rule of financial prudence that 3 times your salary was the maximum you should borrow. Given that the average salary is under £30k in Scotland, it's clear that the banks are still engaging in totally irresponsible lending. So many people must be right on the edge of disaster if a single thing goes wrong. At least with a mortgage you can sell your house and own a bit more of it every month, compared to renting which I believe costs more and you own nothing. I'm paying the equivalent of a 200k mortgage payment in rent. 2 Quote Link to comment Share on other sites More sharing options...
welshbairn Posted October 30, 2021 Share Posted October 30, 2021 The 3x earnings thing is from the olden days when house prices were on a level that a household with one earner could just about afford. Now the market assumes 2 earners, so more like 6 times. 0 Quote Link to comment Share on other sites More sharing options...
scottsdad Posted October 30, 2021 Share Posted October 30, 2021 On the chap that started this discussion, he bought a house in Alloa in the early 90s. Married with no kids. Don't know the figures. 0 Quote Link to comment Share on other sites More sharing options...
Abdul_Latif Posted October 30, 2021 Share Posted October 30, 2021 5 minutes ago, oaksoft said: Or one of them has a serious injury or illness before they reach their late 50s. Imo you should have suitable insurance to cover that situation as a home owner. 0 Quote Link to comment Share on other sites More sharing options...
scottsdad Posted October 30, 2021 Share Posted October 30, 2021 21 hours ago, oaksoft said: So, I have a theory about this but I might be straying perilously into mansplaining territory here but maybe some are not aware of what academia is actually like. A young academic will normally be used to academia via pure research in their PhD (even earlier than that in some cases). Hunting down research funding, publishing a ton of stuff, getting accolades, awards, prizes etc. It's all pretty high octane stuff if that's what you are interested in. They then spend a few years as a post-doc (sometimes over 10 years), maybe gaining a fellowship at some point before securing full time employment for the first time in academia in their mid 30s (and routinely even older than that). The problem is that IMO, most academics have no idea about the true nature of the job they spend more than a decade chasing. They THINK it's going to be all sexy research but it turns out to be little more than an office-based administrative job with a bit of teaching that they could almost certainly have done with their eyes shut at the age of 21 without a PhD. The actual research is primarily done by their post docs and PhD students (all of whom need to be personally recruited by the academic - more paperwork). The disappointment for most people must crush them. Academic politics then fills that void because any form of strategic stuff is more interesting and engaging than the mundane work they are being paid for. And that's where IMO it all stems from. People with big brains, bored off their tits. If these people were only engaged in pure research themselves they'd have no time or inclination for wasting their entire careers indulging in trivial office nonsense. Anyway, that's my theory. True for many but not all. For me I did a 2 year post doc then did 7 years in a civil service agency before coming back to academia. Trust me, the admin in academia is a fraction of the admin in the civil service! I was very bored in the civil service. Not so much now. I was probably happiest as a PhD student. A focused research project, defined goal, no admin, working in a good team. I make sure I do a lot of research myself these days, not just farm it out to others. 1 Quote Link to comment Share on other sites More sharing options...
welshbairn Posted October 30, 2021 Share Posted October 30, 2021 1 minute ago, oaksoft said: Good luck with that. Especially if you are self employed or decide to go into that in the future. Make sure you read the small print. They won't pay it forever and if you get any job at all, regardles of wage, the payments will stop. There's been plenty written about this type of insurance over the years. Quite, I'm still fighting over my pay off for mis-sold PPI, was told it was a condition of my mortgage but the t&cs meant they would never have paid out. 0 Quote Link to comment Share on other sites More sharing options...
Left Back Posted October 30, 2021 Share Posted October 30, 2021 33 minutes ago, oaksoft said: Yep. And that's great providing you don't have kids and both stay at the same level of salary. Redundancy, kids and long term illness or injurt could be party over time. Most people end up having 1 or 2 kids and they either spend most of that second wage on childcare or one of them has to drop to part time or give up work altogether. If I remember, it used to be 2 or 2.5 times the combined wage. It wouldn't surprise me if banks were simply ignoring all forms of prudence these days. and certainly I think many people taking on these massive loans are doing so thinking the ultra low interest rates will stay around forever. I suppose it's about how much risk you want to take on. I couldn't sleep at night with that ort of debt hanging over me. No-one plans their life based on expecting redundancy or long term illness. True these things can happen but if you worried about everything you’d never do anything. Banks lending criteria got more stringent around 5 years ago. They now don’t base things only on your salary. They have to do affordability checks so look at your outgoings to see if you can actually afford the monthly payments. If your financial situation changes due to having kids then you have the time to plan and adjust accordingly. As others have said £140k is not a large mortgage these days. If mine was only that I’d be delighted. If you want to buy a home in lots of areas of the country you have to borrow a hell of a lot more than that. Could be worse. Could still be living in London where an average punter has no chance of buying. Interest rates will go up eventually and no doubt some people will get burned but it’s up to people to manage their own risk. 0 Quote Link to comment Share on other sites More sharing options...
Abdul_Latif Posted October 30, 2021 Share Posted October 30, 2021 30 minutes ago, oaksoft said: Make sure you read the small print. They won't pay it forever and if you get any job at all, regardles of wage, the payments will stop. There's been plenty written about this type of insurance over the years. Oh I don’t disagree, though I’d suggest that’s the absolute minimum anyone should do before taking out their policy. 0 Quote Link to comment Share on other sites More sharing options...
Dan Steele Posted October 30, 2021 Share Posted October 30, 2021 6 hours ago, oaksoft said: I must admit, I never met a single academic who did any of the actual research themselves. Should've left the Science block and met Arts & Humanities folk then. 0 Quote Link to comment Share on other sites More sharing options...
git-intae-thum Posted October 30, 2021 Share Posted October 30, 2021 ...more entertaining work stories about nutty professor types etc please..... less boring rubbish about mortgages....thats all thank you. 6 Quote Link to comment Share on other sites More sharing options...
Honest Saints Fan Posted October 31, 2021 Share Posted October 31, 2021 13 hours ago, oaksoft said: I might be wrong but I'm not sure there's a policy out there which will do what you are suggesting though. A permanent health insurance policy will pay you x amount a month if you have to give up work due to injury/illness. I have one through my work. I will get 75% of my pre tax salary with no deductions if I have to stop working. It will pay out until retirement age. 1 Quote Link to comment Share on other sites More sharing options...
Aufc Posted October 31, 2021 Share Posted October 31, 2021 Had a wee Google and apparently the average UK mortgage is £140k. I feel sick just thinking about having that level of debt. No wonder the Bank of England is reluctant to raise interest rates back to historically normal levels of 5%. It was always the rule of financial prudence that 3 times your salary was the maximum you should borrow. Given that the average salary is under £30k in Scotland, it's clear that the banks are still engaging in totally irresponsible lending. So many people must be right on the edge of disaster if a single thing goes wrong.I’m guessing you are a bit older when house prices were much less. I do tend to agree that there will be a lot of people in trouble when interest rates go up. Personally I signed a 5 year deal at 1.4% late last year. By the time the deal is up I won’t be paying nursery fees of £600 a month and will hopefully be promoted with a big pay rise. I realise I am pretty fortunate but a lot of people won’t be. Will be a worry for a lot of people albeit one they might not consider with everything currently ongoing 0 Quote Link to comment Share on other sites More sharing options...
strichener Posted October 31, 2021 Share Posted October 31, 2021 On 30/10/2021 at 09:26, Left Back said: Two people in the family can work and get a joint mortgage with 3 x combined salary. Back in the day it was 3x single or 2.5x joint incomes. 0 Quote Link to comment Share on other sites More sharing options...
Empty It Posted October 31, 2021 Share Posted October 31, 2021 So 2 people earning £30k times 3 is £180k so £140k is decent. Then of course you have plenty of people earning a lot more than that.I’m in Edinburgh and you’d be lucky to get a decent home for £180k never mind 140kYou do have a point though, a lot of people will be in trouble if the interest rate jumps.In Edinburgh someone might let you put a tent in their garden for 180k, I'm in East Lothian and it's not much better. 0 Quote Link to comment Share on other sites More sharing options...
Jacksgranda Posted October 31, 2021 Share Posted October 31, 2021 22 hours ago, Abdul_Latif said: Imo you should have suitable insurance to cover that situation as a home owner. My wife paid off her mortgage through her Critical illness Cover. 0 Quote Link to comment Share on other sites More sharing options...
Sergeant Wilson Posted October 31, 2021 Share Posted October 31, 2021 25 minutes ago, Jacksgranda said: My wife paid off her mortgage through her Critical illness Cover. ^^^landed on his feet. 0 Quote Link to comment Share on other sites More sharing options...
Jacksgranda Posted October 31, 2021 Share Posted October 31, 2021 Just now, Sergeant Wilson said: ^^^landed on his feet. Not quite, she's still living. 9 Quote Link to comment Share on other sites More sharing options...
Sergeant Wilson Posted October 31, 2021 Share Posted October 31, 2021 Just now, Jacksgranda said: Not quite, she's still living. All in good time. 0 Quote Link to comment Share on other sites More sharing options...
Jacksgranda Posted October 31, 2021 Share Posted October 31, 2021 19 years and counting... 0 Quote Link to comment Share on other sites More sharing options...
Todd_is_God Posted October 31, 2021 Share Posted October 31, 2021 (edited) 6 hours ago, Honest Saints Fan said: A permanent health insurance policy will pay you x amount a month if you have to give up work due to injury/illness. I have one through my work. I will get 75% of my pre tax salary with no deductions if I have to stop working. It will pay out until retirement age. Yeah I thought it was a bit odd him saying that. You can generally get 12mth, 24mth and until 65 cover. For healthy people, it really isn't that expensive. Of course, once you are unlucky enough to have something, it not only becomes more expensive, but isn't covered either! A lot has changed over the last 6 months to the point I plan on reviewing my cover in the new year. Edited October 31, 2021 by Todd_is_God 0 Quote Link to comment Share on other sites More sharing options...
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