Leeds: 5 year fix at 4.59%

Emy1501

Harry_Powell wrote: »

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??

When I took out a mortgage in 96 you had to have a repayment tool attached to the mortgage which was normally either the convential repayment mortgage or an interest only mortgage with an endowment policy. Now the conventional repayment mortgage will always pay off but as many found few endowments taken out in the 80's and 90's will ever pay off.

Over the last few years as banks attempted to maximise profits the question regarding a repayment vehicle went out the window and many lenders were happy to simply lend on a IO basis without any request of how the mortgage would be eventually paid off.

Now few lenders will lend to someone buying a home to live in rather than BTL without a repayment vehicle that the lender believes will pay off.

http://blogs.thisismoney.co.uk/this_is_money_blog/2009/10/the-interestonly-mortgage-timebomb.html

It shows the rise of interest-only mortgages as house prices boomed from 2002 to 2007, from 13% of those taken out to 33%.



The FSA report highlights that 'the vast majority had no repayment vehicle specified'.

ess0two

carolt wrote: »

That's a pants rate.

Why on earth has it been given a thread of its own, OP?

Seems to be getting worse,there was thread about the times online charging for content recently.

Blacksheep1979

phil_b wrote: »

That sort of rate would mean around £675 a month on a repayment mortgage over 38 years, on the average priced house with a 10% deposit?

Even for a single person on average UK wage (based on published stats) that shouldn't be a great problem to service?

I must be missing something here.

yeah that you need a 40% deposit and most people don't take it over 38 years...