got an interest only morgage? Whats your plan?

Pay_ALARP

PeteHi wrote: »

similar to me.

in 24 years time I won't be in this house anyway, so couldnt really care less. So I'll either sell up and give the mortgage company what they are owed, using whatever equity we have in the house to buy a nice little place abroad
(Im pretty sure house prices will be higher in 24 years than they are now).
or start from scratch again.

It would be nice to be on a repayment mortgage, but Im of the mindset that I'd rather live in a nice, big house interest only for the time being than in a small house on a repayment mortgage. Different people want different things

Pretty much our thinking as well.

fluffyb

We recently changed to interest only and my hubby retires in 3 years.

It has always been our plan anyway to sell up, and downsize to a cheaper area [NOT Surrey where we now live :rolleyes: ] when he retires.

He will get a very good lump sum when he retires which will mean we can pay off the mortgage, move away to a smaller property and finally be mortgage free. We will no longer need as large a house as we have now by then.

We also have savings and if for any reason we couldn't sell for a while our savings alone will pay the mortgage for a while so we will be ok :T

PeteHi

exactly, live for the moment! As for the 'interest only is no different than renting' brigade, I've never had a landlord give me a fair sum of cash when I left

boyse7en

Dan_1976 wrote: »

Also chances are you may owe more than when you started!

How's that work out then?

At the moment a long-term fixed rate IO mortgage is looking like it could be a good thing if inflation goes high (which is looking likely, as the Treasury have to find some way of paying back the £billions there are borrowing to finance Quantitative Easing) then the loan will reduce in real terms during its term.

Peelerfart

PeteHi wrote: »

exactly, live for the moment! As for the 'interest only is no different than renting' brigade, I've never had a landlord give me a fair sum of cash when I left

But then have you ever rented a place where you are responsible for the upkeep and maintenance ?

ILW

As Joeskeppi said, Why do IO mortgages have a term?

Dan_1976

Would you lend anybody £150k and I will pay you back the capital one day??

When I have remortgaged people in the past and I ask to see a redemption statement they always seem to have forgotten about the £999 product fee they added to the mortgage when they fixed it last! Imagine doing that ever two years! OK £400-£999 may be more like it, but people do it! Also admin charges, late payments, annual interest lots of reasons.

The thing that shocked me was how many people never new the balance or never had a redemption statement to hand!

System

ILW wrote: »

As Joeskeppi said, Why do IO mortgages have a term?

At the end of the term you pay off the debt or give them the house keys.

Or more likely, remortgage, in fact I doubt many people ever get to the end of an interest only term.

silvercar

On my first 3 house purchases (consecutively rather than all at the same time) we had endowment policies running alongside the IO mortgage. Our last move means that the endowment policies cover a third of the mortgage amount. The rest we will pay back by making lump sum payments as and when. The strategy is to pay it off within 5 years; I'll change that to 7 years if needs must.

I have many friends (we all first bought in the eighties) who have increased their mortgages over time and no have no intention of repaying the capital. Once their kids have left home they will sell up and trade down or further out of London. It means that at the time their kids were growing up they had a big family home and they are happy with that decision. Even with the current house price crash, their houses are worth at least triple what they paid, so they feel relatively safe.

Wutang_2

ILW wrote: »

As Joeskeppi said, Why do IO mortgages have a term?

Is that a joke??