AFKA - If it helps my mortgage (which I took iout last September) went from £1083 back then to now being £815.94 - and thats before todays announcement
I sometimes wonder why I bother living within my means. I might as well spend up everything I have and wait for the government to bail me out. There certainly doesn't seem to be much point in having any savings at the moment.
I'm on a tracker but my Mortgage lender won't be passing on the cut because the interest has gone below 3%. Evidently, it's in the small print. Not a happy bunny
[cite]Posted By: carly burn[/cite]Can someone explain to me please just how an interest only mortgage works in layman terms please.
I understand you only pay the intrest(DOH!) but what about the rest of the debt.
Cheers
You are supposed to save it and pay in a lump at the end. I think they ask you do an endowment or something...
Can't say I have looked into it but I am considering it. It would give me lots of spare cash for now...and I stand to inherit a fair sum within the next 20 years
Halifax last week offered us 5% rate as their standard variable for us when our fixed rate ends at the end of december. does this mean it will be lower than 5% because of the cuts today?
In theory and if it generates enough sum - but no guarantees.
Many with interest only mortgages use it to get on the property ladder because they can then afford to borrow a higher sum than a repayment mortgage - intending to trade the property when they've increased the equity. Well that WAS the theory!
Often interest only is popular with the self-employed - because again they may need to self-certificate their status, not having the luxury of a 'guaranteed' salary paid monthly.
'Interest only' obviously has no repayment element and £ for £, is therefore cheaper to borrow - those self-employed on variable incomes then have a lower threshold of mortgage payment to find each month, so less risk that they could be re-posessed. Of course, they always pray their business will take off in the near future and then can trade up or whatever!
If you borrow on an interest only mortgage, eg £200000, at the end of the specified term, or when you pay off the mortgage, from a house sale , inheritance etc. you will still owe the full £200000.
All the time you pay at least the interest on a mortgage, the bank will not repossess your home.
If anybody has any specific mortgage questions, feel free to whisper me.
[quote][cite]Posted By: Swisdom[/cite][quote][cite]Posted By: carly burn[/cite]Can someone explain to me please just how an interest only mortgage works in layman terms please.
I understand you only pay the intrest(DOH!) but what about the rest of the debt. Cheers[/quote]
You are supposed to save it and pay in a lump at the end. I think they ask you do an endowment or something... Can't say I have looked into it but I am considering it. It would give me lots of spare cash for now...and I stand to inherit a fair sum within the next 20 years
Alternatively you could do a Reggie Perrin.....[/quote]
Stick to a straight repayment mortgage. I'm in the business and would not touch an endowment!!
Does the Abbey ( if my memory serves me right, you work for them) have a collar on their trackers-
i can't find it anywhere in their T&C's or on any offers for my clients so isuspect not- but an insiders insight would be really helpful as i can't get hold of my rep at the moment..
[cite]Posted By: carly burn[/cite]Can someone explain to me please just how an interest only mortgage works in layman terms please.
I understand you only pay the intrest(DOH!) but what about the rest of the debt.
Cheers
You are supposed to save it and pay in a lump at the end. I think they ask you do an endowment or something...
Can't say I have looked into it but I am considering it. It would give me lots of spare cash for now...and I stand to inherit a fair sum within the next 20 years
Alternatively you could do a Reggie Perrin.....
Well, over the last 30-odd years house prices have doubled every 7 years on average. So if buy a £200,000 house today on a 30 year mortgage, then at the end of the 30 years the house would be worth £3.2million, you sell up at that stage, pay off the £200,000 and pocket the rest.
Now house prices aren't going to keep going up over the next 30 years the way they have done, but they are going to at least treble of that period, so as long as you can downsize at that time then saving isn't necessary. Of course, if there is a prolonged global economic downturn (i.e 5-10 years rather than 1-3 years) then all bets are off, but in that situation savings still may not help as skint banks can't give you your money back and the government don't guarantee that sorts of sums you'd need to pay off a house.
[cite]Posted By: StanmoreAddick[/cite]A quick one CafcBrowm.
Does the Abbey ( if my memory serves me right, you work for them) have a collar on their trackers-
i can't find it anywhere in their T&C's or on any offers for my clients so isuspect not- but an insiders insight would be really helpful as i can't get hold of my rep at the moment..
Cheers
Stanmore
I'm pleased to tell you Stanmore, that the Abbey have no collar on their BofE tracker - your new rate should therefore be 2.75%.
With my current overpayments I'm on track to be mortgage free by April :-)
[cite]Posted By: StoneChurchGremlin[/cite]'Like i've said on here before, anyone who's still got their money in sterling is stupid enough to deserve everything that they get.'
Hence why you shouldn't be suprised why the U.K wil sign up to the Euro in the coming years, if not months.
Otherwise we'll see the first £100 and £200 notes as hyper-inflation sets in.
1) I've got my money in sterling because I live, work and spend in the UK.
2) I would be very surprised if any Government moved us into the Euro Zone without first asking the electorate. I'm still not convinced what benefit if gives us other than to protect us from speculators. The Euro will suffer in the next few months as well, as attention is drawn to its current strength.
3) I've had a £100 note already. Who cares how many noughts there are at the end of the pound sign. Do you miss the ha'penny?
4) How much is hyper inflation - I remember inflation running at about 15% nearly 30 years ago - that was frightening. We just devalued.
Comments
If the government bank does, then the pressure is on the private sector to follow suit.
Or even their 7 player loans ...?
;o)
I would think its worth taking the hit mate
That might-just- encourage people to spend in these times.
I understand you only pay the intrest(DOH!) but what about the rest of the debt.
Cheers
I'm on a tracker but my Mortgage lender won't be passing on the cut because the interest has gone below 3%. Evidently, it's in the small print. Not a happy bunny
You are supposed to save it and pay in a lump at the end. I think they ask you do an endowment or something...
Can't say I have looked into it but I am considering it. It would give me lots of spare cash for now...and I stand to inherit a fair sum within the next 20 years
Alternatively you could do a Reggie Perrin.....
Cheers Swis.That's what i thought.And from what i know about endowments sounds best to steer well clear.
Now paying 2.94%. Tracker at 0.94% above base rate for full term of my mortgage. Long may the low rates continue!!!
Halifax have confirmed that they will pass on the latest cut in full to their tracker rate customers......
Cheers Stanmore, that's made my day
Isn't the endowment part some sort of insurance to pay off the debt at the end?
Many with interest only mortgages use it to get on the property ladder because they can then afford to borrow a higher sum than a repayment mortgage - intending to trade the property when they've increased the equity. Well that WAS the theory!
Often interest only is popular with the self-employed - because again they may need to self-certificate their status, not having the luxury of a 'guaranteed' salary paid monthly.
'Interest only' obviously has no repayment element and £ for £, is therefore cheaper to borrow - those self-employed on variable incomes then have a lower threshold of mortgage payment to find each month, so less risk that they could be re-posessed. Of course, they always pray their business will take off in the near future and then can trade up or whatever!
All the time you pay at least the interest on a mortgage, the bank will not repossess your home.
If anybody has any specific mortgage questions, feel free to whisper me.
I understand you only pay the intrest(DOH!) but what about the rest of the debt.
Cheers[/quote]
You are supposed to save it and pay in a lump at the end. I think they ask you do an endowment or something...
Can't say I have looked into it but I am considering it. It would give me lots of spare cash for now...and I stand to inherit a fair sum within the next 20 years
Alternatively you could do a Reggie Perrin.....[/quote]
Stick to a straight repayment mortgage. I'm in the business and would not touch an endowment!!
Does the Abbey ( if my memory serves me right, you work for them) have a collar on their trackers-
i can't find it anywhere in their T&C's or on any offers for my clients so isuspect not- but an insiders insight would be really helpful as i can't get hold of my rep at the moment..
Cheers
Stanmore
Well, over the last 30-odd years house prices have doubled every 7 years on average. So if buy a £200,000 house today on a 30 year mortgage, then at the end of the 30 years the house would be worth £3.2million, you sell up at that stage, pay off the £200,000 and pocket the rest.
Now house prices aren't going to keep going up over the next 30 years the way they have done, but they are going to at least treble of that period, so as long as you can downsize at that time then saving isn't necessary. Of course, if there is a prolonged global economic downturn (i.e 5-10 years rather than 1-3 years) then all bets are off, but in that situation savings still may not help as skint banks can't give you your money back and the government don't guarantee that sorts of sums you'd need to pay off a house.
I'm pleased to tell you Stanmore, that the Abbey have no collar on their BofE tracker - your new rate should therefore be 2.75%.
With my current overpayments I'm on track to be mortgage free by April :-)
Cheers Addickted.....
As a reality check for those out there about what will happen to interest payments over the next month or so...
£100,000 mortgage Interest at 5.75% = £5750pa.... £479pm
£100,000 mortgage interest at 2.75%- £2750pa. £229 pm.
Hence why you shouldn't be suprised why the U.K wil sign up to the Euro in the coming years, if not months.
Otherwise we'll see the first £100 and £200 notes as hyper-inflation sets in.
1) I've got my money in sterling because I live, work and spend in the UK.
2) I would be very surprised if any Government moved us into the Euro Zone without first asking the electorate. I'm still not convinced what benefit if gives us other than to protect us from speculators. The Euro will suffer in the next few months as well, as attention is drawn to its current strength.
3) I've had a £100 note already. Who cares how many noughts there are at the end of the pound sign. Do you miss the ha'penny?
4) How much is hyper inflation - I remember inflation running at about 15% nearly 30 years ago - that was frightening. We just devalued.
Hyper inflation looks incredibly unlikely - deflation looks a darn sight more likely - like Japan in the 1990's