Quarter of Brits on interest only mortgages

mewbie_2

michaels wrote: »

Can't be bothered to read beyond page 2 but:

In the 2 years since I have had my mortage I have increased it by 50% (MEW)

I pay interest only

Must be the worst case scenario?

Except I have saved more than the value of the mortgage and have it all on high interest tax free (isa and wife's name) average 6% whilst my mortgage is at 2.18% earning me 7k net this year that I wouldn't have if I followed the advice of everyone on here and had a repayment mortgage.

You all stick to your moralising, I will stick to spending the 7k!

Spend it? Surely pay off some mortgage? Point proven to all I think.

wageslave

chucky wrote: »

errr no - chucky only needs one user name to say what he needs to say.

have we ever had any issue before for you to be as antagonistic as you are towards me or is this normal for you?

Chucky, now you are just being a donut.

kabayiri

geoffky wrote: »

how do you know they understand what a interest only mortgage is....

Are you suggesting that they have a lack of interest in their interest only mortgage?

I'm struggling with that one.....

michaels

Let me pay off the mortgage by 7k then - that means 7k less earning me 6% and costing me 2% - any more good suggestions Mewbs? Will you sub me the 245 I will be loosing out on (pa)?

mewbie wrote: »

Spend it? Surely pay off some mortgage? Point proven to all I think.

Graham_Devon

michaels wrote: »

Let me pay off the mortgage by 7k then - that means 7k less earning me 6% and costing me 2% - any more good suggestions Mewbs?

Spending it also means 7k less earning you 6%.

Or have I missed something critical here?

mewbie_2

michaels wrote: »

Let me pay off the mortgage by 7k then - that means 7k less earning me 6% and costing me 2% - any more good suggestions Mewbs?

Well you did say spend it. If you are not going to spend it, but plan to pay off mortgage when the rates even out as they will in a couple of years I guess, then that is a slightly different story. Woop de doo you have paid off some mortgage.

bluey890

michaels wrote: »

Let me pay off the mortgage by 7k then - that means 7k less earning me 6% and costing me 2% - any more good suggestions Mewbs?

What product are you receiving 6% net from?

chucky

wageslave wrote: »

Chucky, now you are just being a donut.

so why the silly questions?

Pobby

In a land, far, far away, was a different place than we live. You had houses, bungalows and flats. They were nice. A little guy in an average job looked at one of those. Hmmmm, with a bit of effort and a little self sacrifice he could save some money and put down a little deposit. Suddenly he he had a mortgage, around 25% of his take home pay. It was to last 25 years but little by little he did OK at work and soon it was only 20%. He liked that. As each year went by he owed a little less on his home.

One day he realised that suddenly his home had increased by 10%, the next year by 15%. Surprised that he was he thought little about it. He had no idea why. Some of his friends said it was due to demand. Where have all these people come from he thought? Were they living in holes in the ground and now have decided on mass that they wanted to by. He didn`t know, nor did he feel richer from the fact that on paper he was worth a little more.

His friend at work bought a new car. He asked how he afforded that. I have mewed came the reply. Mewed, oh you increased what you owe on the house. Ok. He pondered on that. he then realised that that mewing was only using your house as security to get a loan. Hmmmm, he thought, that seems a bit foolish.

The next year his income increased by 2% yet his home had increased by 15%. he wondered why. Ah there are reasons another friend said. It`s different this time, they won`t let a crash happen. Why were they rising he thought. Now married and with 2 kids he looked to get something bigger. Wow he thought, that`s another £50,000 I need to borrow. Can`t be done.

Oh yes it can said the suited, balding guy who had a loan shop in the North East. Further more you can have 25% on top of that " because you are worth it". New motor and a nice holiday, what do you think? He was told that house prices would ever only go up. By George, even in Newcastle, a 2 up, 2 down would be worth at least a million in a few years.

All over America as well as the UK, many believed it. We must get more folk to buy cried the bankers who seem very nice chaps as they didn`t want anyone to miss out on this bonanza. Anyway it was OK as a fat, jolly Scottish person had said years before that he wouldn`t let the housing market get out of control. Well everything is fine , they promised.

The nice people said, we will help you, have this loan, it`s only a a couple of percent and that`s just interest. No need to give back what you have borrowed. A very nice lady who used to be on afternoon telly actually explained what equity was, smashing, it`s money earned from home ownership, free money to spend.

One day, the nice people who gave all this money away realised that they had run out. Even worse, the very people who they had helped out were not sending them any money. Oh dear, what`s happened they cried. My, the homes aren`t rising any more, in fact they are going down. The jolly fat Scottish person leapt in. I control the country. All my subjects will lend you over £2,000 each and all you bald people who have mad a silly mistake will get to have lots of money because you are very nice.

Part 2 later.

Gorgeous_George

geoffky wrote: »

...New research has shown that nearly one-quarter of British homeowners are paying off their mortgage on an interest-only basis.

If it is interest only, they are NOT paying off their mortgage.

GG