Quarter of Brits on interest only mortgages

mewbie_2

It does sound like a proper mortgage is better than a long term crippling loan.

Dan:_4

nearlynew wrote: »

What a lovely thought.

Spend 25 years paying rent to the bank. Then when you retire take out another loan to pay for your house.

This confirms my theory that all HPI cheerleaders are, in relity, debt jukies.

thank you

Or, spend 25 years paying rent to a landlord and having nothing at the end.

I know what I would prefer to do.

Dan:_4

wageslave wrote: »

It used to be a prerequisite of interest only mortgages that you had to have a vehicle in place to repay the capital sum when the mortgage came to term.
I think that condition was quietly dropped after the mis-selling of endowments fiasco.

You could always cancel such policy, so not really something new.

wageslave

Dan: wrote: »

You could always cancel such policy, so not really something new.

No you couldn't, it was a condition of your mortgage that you had the policy and the policy itself was held by the building society.
It is a disgrace that banks and building societies have continued to give interest only mortgages knowing most people have no way, other than HPI, of repaying the debt and keeping their home. Irresponsible lending at its worst.

wageslave

Dan: wrote: »

Or, spend 25 years paying rent to a landlord and having nothing at the end.

I know what I would prefer to do.

At least you can continue living in the rented house.

Dan:_4

wageslave wrote: »

At least you can continue living in the rented house.

Unless the landlord wants you out anytime.

wageslave

Dan: wrote: »

Unless the landlord wants you out anytime.

If you have no way of repaying the capital the bank are definately going to want you out at the end of the mortgage term.

The_Fat_el_Hombre

Could this figure be higher in the future when those buying houses now at low interest rates come to re-mortgage and find the interest rate is much higher and they can no longer afford to pay off the capital as well?

Dan:_4

wageslave wrote: »

If you have no way of repaying the capital the bank are definately going to want you out at the end of the mortgage term.

A landlord could throw you at anytime.

Over a 25 year mortgage the property would have increased significantly anyway.

Graham_Devon

Dan: wrote: »

Or, spend 25 years paying rent to a landlord and having nothing at the end.

I know what I would prefer to do.

Errr, either way, it's the same, unless HPI has rescued you.

Also, this is just one crash. How does anyone know there will not be another in 10 years time?

HPI is NOT Guarenteed. It's a gamble, a good gamble, but still a gamble, and it literally depends on timing, timing thats completely out of your control.