r/Glasgow Tools

Title
Author	meepmeep13
Comment	To give some useful perspective on the worst case scenario, my experience might be useful. I bought my first house around the peak of the market in 2005. I paid approximately 10% over the already extremely high asking price (this was before Home Reports came in). I borrowed/begged everything I could to get it. After the 2008 crash, my home lost approximately 25% of the value compared to what I paid for it. I sold it at a significant loss when I moved to Glasgow. But you know what? I lived there for 7 years and still saved tens of thousands of pounds compared to renting, even after taking that loss on the chin. So remember - the mathematics of buying a home to live in are entirely different to the mathematics of buying a home as a financial investment. All that matters is what the home is worth to you as a home compared to the monthly payment you'll be making on the debt. Remember, if you're taking out a 25-year mortgage, on an average 3% rate you're paying back 150% of the capital over that term anyway, which eclipses anything the market will do. So don't get bogged down in whether you'll get all your money back, if you're planning to live there for more than a few years the market would have to devalue a lot for it to be a bad financial decision.
Reddit Link	https://www.reddit.com/r/glasgow/comments/u4cl4c/buying_anxiety/i4vr18e/
Created	Fri 15th Apr 2022 10:25pm
Status	normal ()

To give some useful perspective on the worst case scenario, my experience might be useful.

I bought my first house around the peak of the market in 2005. I paid approximately 10% over the already extremely high asking price (this was before Home Reports came in). I borrowed/begged everything I could to get it.

After the 2008 crash, my home lost approximately 25% of the value compared to what I paid for it. I sold it at a significant loss when I moved to Glasgow.

But you know what? I lived there for 7 years and *still* saved tens of thousands of pounds compared to renting, even after taking that loss on the chin.

So remember - the mathematics of buying a home to live in are entirely different to the mathematics of buying a home as a financial investment. All that matters is what the home is worth *to you as a home* compared to the monthly payment you'll be making on the debt.

Remember, if you're taking out a 25-year mortgage, on an average 3% rate you're paying back 150% of the capital over that term anyway, which eclipses anything the market will do.

So don't get bogged down in whether you'll get all your money back, if you're planning to live there for more than a few years the market would have to devalue *a lot* for it to be a bad financial decision.