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Can someone explain 'trading up' to me? :)

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    #32
    GingerLily
    Registered Users Posts: 4,767 ✭✭✭GingerLily


    Cuddlesworth wrote: »
    https://www.drcalculator.com/mortgage/

    If you want to take a look at what your paying and when.

    Excel works just fine!


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    #33
    Amirani
    Moderators, Society & Culture Moderators Posts: 12,521 Mod ✭✭✭✭Amirani


    jon1981 wrote: »
    The aul "getting on the ladder" and the myth that trading up is free :D. Trading up was never possible without carrying more debt in the process or higher repayments over a shorter period unless a couple of factors are in your favour:

    1) You have more cash and have had regular pay increases far far above inflation
    2) You moved to a less desirable location for a larger house ( does that still meet the definition of trading up?!)
    3) You've timed the market well, sold at the top and waited out the bottom...not many can do this.
    4) Your property appreciated more so than the target location/house.
    5) Inheritance...lottery...etc.

    You're missing a pretty crucial one; didn't overextend/max out affordability on first mortgage. If you purchase somewhere that's easily affordable, you can then save enough over the interim period to be able to "trade up".

    Also on point 1 - if you're young and well educated, you can normally expect to achieve pay increases comfortably ahead of inflation. This will be the case for a large cohort of potential buyers.


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    #34
    ELM327
    Registered Users Posts: 21,544 ✭✭✭✭ELM327


    Cuddlesworth wrote: »
    https://www.drcalculator.com/mortgage/

    If you want to take a look at what your paying and when.
    Pretty accurate. For my own case given purchase price, term, interest and LTV figures it was approx 15% off on my monthly repayment.
    The interest apportioning of repayments on a pro rated basis seems to tie in with my own interpretation of the bank's formula per T+C


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    #35
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    Amirani wrote: »
    Also on point 1 - if you're young and well educated, you can normally expect to achieve pay increases comfortably ahead of inflation. This will be the case for a large cohort of potential buyers.

    Good point, there's also a lot of well paid foreign nationals moving here from the US and other carrying alot of RSUs (Stock)


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    #36
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    The main point of trading up, is to buy a dwelling, avoid paying rent, protect
    yourself from rising price.s .In 5 years time you might not be able to get
    a loan to buy a house in a city or the area thats close to your job.
    IF you are single you might get married in the future and buy a joint property ,
    2 people can borrow more than a single person.
    OF course who knows what prices will be in 10 years time, or
    what will happen with interest rates .
    So theres no such thing as a simple formula for trading up .


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    #37
    colm_mcm
    Registered Users Posts: 73,392 ✭✭✭✭colm_mcm


    riclad wrote: »
    Even if property prices fall, at least you are not paying rent

    That’s assuming you’re not in over your neck and in massive negative equity.


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    #38
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    colm_mcm wrote: »
    That’s assuming you’re not in over your neck and in massive negative equity.

    Still not paying rent!


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    #39
    zl1whqvjs75cdy
    Closed Accounts Posts: 4,042 ✭✭✭zl1whqvjs75cdy


    colm_mcm wrote: »
    That’s assuming you’re not in over your neck and in massive negative equity.

    Long as you buy something that suits your long term needs you'll be fine. I bought a 4 bed semi although I have no kids yet. I would like to trade up to a nicer house at some stage but if I get stuck in the current one it won't be the end of the world


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