Leeds: 5 year fix at 4.59%

lisyloo

Originally Posted by Emy1501
The only reason some takes out IO without a repayment tool is because they cannot afford anything more.

Rubbish.
I have an I/O mortgage and can afford to pay loads off at the drop of a hat, but at 0.99%, I'd prefer to put my money elsewhere.
FS offset mortgages are I/O.

chucknorris

Emy1501 wrote: »

Have a look at their website. Also with saving rates so low why would anyone have an interest only loan and not pay off their mortgage when rates can only go one way.

There are a lot more lucrative ways of making money than merely depositing it in savings accounts if you have the ability, knowledge and motivation. So maybe because other investment or business opportunities of the capital repayments are worth more to them than a return merely equivelant to a mortgage rate. Especially if someone needs a business loan because the rate of that would easily exceed that of a residential mortgage.

chucknorris

lisyloo wrote: »

Rubbish.
I have an I/O mortgage and can afford to pay loads off at the drop of a hat, but at 0.99%, I'd prefer to put my money elsewhere.
FS offset mortgages are I/O.
[/I]

I totally agree, I'm also in that position with 4.5 BTL tracker mortgages (my own house is mortgage free), but even when the rate goes back up to about 6% I'm not going to rush out and pay off the mortgages. I would rather pay the small penalty of the interest shortfall difference to have the cash ready to invest in future opportunities.

DaddyBear

Pobby wrote: »

2 bed starter home
40 year mortgage.

:eek::eek::eek::eek::eek:

That's not a starter home, that's a House for life.
Not sure where the kids are going to sleep but at least when he's old and frail it won't take much maintenance.

Emy1501

lisyloo wrote: »

Rubbish.
I have an I/O mortgage and can afford to pay loads off at the drop of a hat, but at 0.99%, I'd prefer to put my money elsewhere.
FS offset mortgages are I/O.
[/I]

SO you think the vast majroity of people have mortgages at .99 above base rate? If banks with endownments were not able to beat repayment mortgages how do you think the avergae Joe will?

There will always be those who are able to invest and get a better return that paying off the mortgage but these will be a small minority not the majority.

Emy1501

chucknorris wrote: »

There are a lot more lucrative ways of making money than merely depositing it in savings accounts if you have the ability, knowledge and motivation. So maybe because other investment or business opportunities of the capital repayments are worth more to them than a return merely equivelant to a mortgage rate. Especially if someone needs a business loan because the rate of that would easily exceed that of a residential mortgage.

Of course there are but few are capable of beating saving return and the many fail. Look at endowment returns.

chucknorris

Emy1501 wrote: »

Of course there are but few are capable of beating saving return and the many fail. Look at endowment returns.

If endowments are the first thing that spring to your mind as a possible alternative I can certainly see why you would want to pay off your mortgage

Emy1501

chucknorris wrote: »

If endowments are the first thing that spring to your mind as a possible alternative I can certainly see why you would want to pay off your mortgage

The point is that back in the 80's many thought Endowments etc would beat repayment mortgages and offer a great return.

The simple fact is many will think they can beat repayment mortgages with various schemes but the many fail.

If though you want to believe that the vast majority with IO mortgages have a repayment tool that is better than the normal repayment vehicle then fair enough but if that is the case then I wonder why few lenders now allow IO mortgages without any evidence of a repayment tool.

I

chucknorris

Emy1501 wrote: »

If though you want to believe that the vast majority with IO mortgages have a repayment tool that is better than the normal repayment vehicle then fair enough

I can't (and don't) speak for the vast majority, merely for myself and offered an alternative to your suggestion that someone who had an interest only mortgage would do so because they could not afford a repayment mortgage.

Harry_Powell

Emy1501 wrote: »

If though you want to believe that the vast majority with IO mortgages have a repayment tool that is better than the normal repayment vehicle then fair enough but if that is the case then I wonder why few lenders now allow IO mortgages without any evidence of a repayment tool.

Once again I find your logic difficult to decipher. First you say that most repayment tools are flawed and then to prove your point you state that few lenders will allow IO mortgages without a repayment tool. What on earth are you talking about??