Quarter of Brits on interest only mortgages

StevieJ

nearlynew wrote: »

Like contributing to house price inflation you mean ?

No, lose your job and mortgage payments are covered by benefits, not so with repayment mortgage (interest only covered), so I believe.

Pobby

My pal hit a rough patch and has kept up the mortgage by going IO. That to me makes sense and he is most likely in negative equity. At 51 I feel he needs a game plan as to what to do in the future. It is loads less than paying rent for it.So yes, it`s true that renting from the bank would make a whole lot of sense. However unless things change, he will have to realise that he will need to raise the capital if he wants to live there forever.

Out of crystal balls but maybe in 10 years time there will be positive equity so all in all it might be an OK move.

ninky_2

almost half the population of england lived in council houses in 1979. i suspect that with that mostly sold off and the majority who would have once lived in council accommodation now left to scrape by in the private sector we have a MASSIVE problem in store in the future. where are those who are currently supporting private rentals with a salary going to live when they retire without adequate equity / savings?

JonnyBravo

Pobby wrote: »

My pal hit a rough patch and has kept up the mortgage by going IO. That to me makes sense and he is most likely in negative equity. At 51 I feel he needs a game plan as to what to do in the future. It is loads less than paying rent for it.So yes, it`s true that renting from the bank would make a whole lot of sense. However unless things change, he will have to realise that he will need to raise the capital if he wants to live there forever.

Out of crystal balls but maybe in 10 years time there will be positive equity so all in all it might be an OK move.

NE at 51?

He faces an uphill struggle til he retires by the sound of it.

nearlynew

The thought of even having a mortgage at 51 would frighten me.

chucky

ninky wrote: »

almost half the population of england lived in council houses in 1979. i suspect that with that mostly sold off and the majority who would have once lived in council accommodation now left to scrape by in the private sector we have a MASSIVE problem in store in the future. where are those who are currently supporting private rentals with a salary going to live when they retire without adequate equity / savings?

it was actually only 30% in 1981 it's steadily declined to under 20%.

in the middle of 2005 private rented was still the same amount as it was in 1981 at around 12%. at a guess it will be just under 15% now.

Pobby

ninky wrote: »

almost half the population of england lived in council houses in 1979. i suspect that with that mostly sold off and the majority who would have once lived in council accommodation now left to scrape by in the private sector we have a MASSIVE problem in store in the future. where are those who are currently supporting private rentals with a salary going to live when they retire without adequate equity / savings?

Well as i understand it, housing benefit. How will the country pick up the tab. It`s more frightening than I thought. However, I never knew that around 50% lived in LA housing. To me that makes the sell off even more shocking. I can always remember Thatch banging on about private sector renting and changing the rules to benefit the landlord.

There will be loads of people with mortgages in late life.

Example, friends of ours bought at 49 on a 20 year mortgage.

[Deleted User]

1/4 !!! Flippin' heck.

I guess its better paying interest-only if thats all you can afford but I think I'd be concerned that none of the capital was ever paid off.

I'm lucky that I've got a VERY good tracker mortgage (base + 1.1%) and I've always fancied the idea of leaving the payment the same when the rate dropped but pay off more but the money saved from cheaper mortgage is always used for something else.

To be honest, my credit card debts could do with paying off a bit....

baileysbattlebus

Pobby wrote: »

Well as i understand it, housing benefit. How will the country pick up the tab. It`s more frightening than I thought. However, I never knew that around 50% lived in LA housing. To me that makes the sell off even more shocking. I can always remember Thatch banging on about private sector renting and changing the rules to benefit the landlord.

There will be loads of people with mortgages in late life.

Example, friends of ours bought at 49 on a 20 year mortgage.

It used to be 18% local authority/housing association and 12% rented.

As Chucky says the private rented market has increased a bit - as home ownership has dropped a bit.

The rents as you know depend on where you live - even council housing - but I can't imagine anyone being on a state pension without some sort of private provision being able to pay the rent on anywhere.

And it doesn't mean that every one currently renting will continue renting - especially private rentals - they seem to be much more transient - probably due to AST.

JonnyBravo

nearlynew wrote: »

The thought of even having a mortgage at 51 would frighten me.

Couldn't agree more. The thought of having one at 40 would scare me.

(But it'll be gone by then..... courtesy of the stockmarket and one little mining company it would seem!)