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Ending a Tesla Lease early
- Thread starter Staypuffman
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nah they'd just hedge the hell out of it so you pay way over the odds but have the security of stable payments I guess. I'm kind of surprised it wasn't something offered when rates were really flat for a long time
Yes. There are and 25, 30 and if you’re young enough 50. But they are not commonly promoted. You just need to ask your bank. Because of the extended term, the bank is taking a larger risk, so the rates will be negotiated at the time.
PITA
Model 3 Performance
But back to my original intent, if you know that you have an ARM. Better budget for it.
If you get an ARM at maybe 2%, just assume that you are going to have to pay at least 10%, if not 15% one day.
So my original statement to the OP that I responded to stands. It sounds as if they overextended.
honestly its not possible to plan for 10-15% rates. house prices are so high these days we’re already well past ‘3x income and 25 year term’ - we’re on 5x or higher and 30 year terms. Deposits that previously would have been 20% are only enough for 5-10%. If you only got a mortgage that you could afford at 10%, then most everyone wouldn’t be able to afford at all
It absolutely is possible.
It really doesn't matter if the house and income are 2x vs 10x.
You can only afford what you can afford.
As is the current problem, if you plan for a 2% rate forever and the rates go up, then you are in trouble.
1+1=2. You can't deny that.
And quite honestly, a Tesla, especially a new Tesla, isn't a basic necessity of life. There are many much cheaper options for transportation out there. They may not be as cool as the Tesla, but WHEN YOU CAN'T AFFORD ONE, YOU CAN'T AFFORD ONE.
If "5x home prices" aren't affordable. Then simply put, you have two realistic options. Find a smaller, cheaper house, or make more money. Since the latter isn't that easy, that means no house or a cheaper house.
No matter how much complaining that you do reality is reality.
And why would you not think that housing vs salary has increased here in the US? Our latest big depression was caused by people buying houses that they couldn't afford. Banks were lending lots of money to people who couldn't even spell their name, let alone have any credit.
There are too many people living outside their means.
What does DNA stand for? National Dyslexic Association 
And before anyone accuses me of making a cruel or inappropriate joke . . . I’m dyslexic.
And before anyone accuses me of making a cruel or inappropriate joke . . . I’m dyslexic.
ACarneiro
Active Member
It takes a brave person these days to try to be humorous on a public internet forum….What does DNA stand for? National Dyslexic Association
And before anyone accuses me of making a cruel or inappropriate joke . . . I’m dyslexic.
in the UK I think the affordability rates talk about 3% above the current rate. I.e ‘can you still afford payment if they’re 5% (if they’re currently 2%). They don’t go 10%-15%. Yes people could choose to modle that, but when financial institutions (presumbably guided by regulation) are using 3% increases for modelling affordability, its understandable thats what regular folk use too.
I’m not saying prices haven’t also gone up in the US. I’m simply using the prices in the UK to illustrate that the multipliers along with flat interest rates have pushed people into stretching perhaps too far. Also by your own comments, having lifetime fixed rates being normal in the US is a huge risk reduction as you have confidence and stable payments for the term of the mortgage. If we had that here, nobody would be batting an eye at the current rate rises - you’d get fewer people remortgaging/buying which would bring house prices down/flatten them, but wouldn’t impact existing owners.
to add - when Mortgage affordability is calculated, they actually use the "what if rate becomes 6.5%" scenario (or similar). so in general, the mortgage affordability is still there. but quality of life suffers as you have to pay more to cover the mortgage.
It's like for the very old Ruzzian joke:
Father gathers whole family for the announcement:
- Folks, I got really bad news - Vodka is getting more expensive.
- Does it mean that you are going to drink less, daddy? - asks one of the kids.
- No, I will drink the same amount. You are going to eat less.
We're victims of a self-inflicted boom bust economy due to folk being too easily manipulated to see the long term picture. I recall one of my staff getting married and because her friends and film, media were all about such plans - well she spent some £12K on the do. That was several months of her salary just for 'the big day'. The marriage lasted 5 years.
I have a different view on matters. I was on excellent earnings with my business, with pre-tax of 18% gross. But to my mind a £3 cup of coffee means £5 before I've paid tax and around £32 I had to gross from some punter in the first place. My solution is to carry a thermos. If I give in to wife wanting a cup while we're out and about then I usually sit without one and listen to her complain about how tight I am. But then again, my Tesla is paid for. and the only loan I ever had was a house mortgage and building extension for my business. And that business expansion was done during the tough bust years so it'd all be ready to go when the next boom happened.
Now I'm retired and an official grumpy old man I can keep muttering 'I told you so'
Oh, and I self catered my own wedding and we're well over 40 years in..
I have a different view on matters. I was on excellent earnings with my business, with pre-tax of 18% gross. But to my mind a £3 cup of coffee means £5 before I've paid tax and around £32 I had to gross from some punter in the first place. My solution is to carry a thermos. If I give in to wife wanting a cup while we're out and about then I usually sit without one and listen to her complain about how tight I am. But then again, my Tesla is paid for. and the only loan I ever had was a house mortgage and building extension for my business. And that business expansion was done during the tough bust years so it'd all be ready to go when the next boom happened.
Now I'm retired and an official grumpy old man I can keep muttering 'I told you so'
Oh, and I self catered my own wedding and we're well over 40 years in..
MrBadger
Badger out
One of the best lessons in life for me was interest rate briefly raising to 17% and 14% mortgages being normal. Not the same issue that those today are faced with as with interest rate doubling etc, but a valuable message that low interest rates were not normal.
The other good lesson in life was house prices crashing and almost halving in value leaving many in negative equity. Just saying…
Thankfully I was able to work both to my advantage (worked hard, then harder and didn’t have the lifestyle that some had) but I do feel for those who have unwittingly been push beyond their means.
The other good lesson in life was house prices crashing and almost halving in value leaving many in negative equity. Just saying…
Thankfully I was able to work both to my advantage (worked hard, then harder and didn’t have the lifestyle that some had) but I do feel for those who have unwittingly been push beyond their means.
In France the rate is fixed for the entirety of the mortgage.
And house prices not being 11 times the median wage.
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