One million homes face Interest-only remortgage threat

IveSeenTheLight

michaels wrote: »

Was there some sort of cap on the SVR magin? It is just that most of the banks hiked the svr spread as rates fell except for those who had written in a maximum cap which was generally 200 basis points.

Certainly no cap as far as I'm aware.
I'm paying 1.6% at present which is BoE + 1.1%

If I was to remortgage I'd be looking at a 5 year fix from which I would intend the mortgage to be cleared by then.

I just can see a 5 year fix that's worth coming off my SVR at present, especially as arrangement fee's also need to be factored in.

I do also check regularly though and when the SVR does start to rise then I'll be making an even closer scrutiny on my options

Until then, I'm loving the overpayments I can make each month

SingleSue

RenovationMan wrote: »

I'm confused, did they move 6 times before they bought their first house?

Yes.

Dad worked in construction which meant that they had to move to where ever the firm had the next contract, hence lots of moves and a waste of time buying a property as they were mostly short term construction projects.

They only bought the house they own because it was a long contract project (building our bypass etc - contract length of at least 4 years) and it made more sense to buy than rent at that time, unfortunately, dad then had his accident and was no longer able to work in construction, so they stayed put.

They luckily had the foresight to purchase a 3 bedroom house even though at the time, they only had one child and another on the way, so more moves were not needed when my sister arrived.

RenovationMan

SingleSue wrote: »

They luckily had the foresight to purchase a 3 bedroom house even though at the time, they only had one child and another on the way, so more moves were not needed when my sister arrived.

That's what I was saying on a previous post, when someone was talking about buying a place, but not wanting to max out their credit and so they were going to buy something that was 'adequate' for their current needs. I argued that its really false economy because what you save initially on the house purchase you lose more because you have to move house more often, with the associated costs and taxes and any HPI therein.

Conrad

People take out an ISA and cancel it the day after the mortgage completes - many lender lenders for years have insisted on a repayment vehicle. No news here, move along.

SingleSue

My parents have been there for nearly 41 years now.

They paid a 10% deposit and then had a normal income to earnings ratio (mum was a stop at home mum, dad was and has always been the only income earner during their marriage) at that time (1969), they didn't push it, didn't over extend themselves to get the larger home...it was just what was affordable (without maxing out their credit) and made sense at the time.

I think they were working on the idea of one child already here and one on the way, best get a 3 bedroom house with room to share a room if anymore children arrived before contract end. I think that is why I think it is perfectly normal to share a room, the first time I had my own room was when I was past my mid 30's and divorced!

pingu2209

So you buy a 3 bed detached house today at £350k with a 25 year interest only mortgage. In 25 years that house will be worth about £550k. If they have not paid anything off they will have £200k after selling their house.

This will buy a 1 bed retirement flat with no mortgage.

Alternatively they will be able to put the £200k towards paying for rent.

julieq

Not quite. 200K won't be worth anything like what it's worth now.

But it's still a better situation than having paid rent for 25 years.

DervProf

julieq wrote: »

Not quite. 200K won't be worth anything like what it's worth now.

But it's still a better situation than having paid rent for 25 years.

Shhhhhh ! You`ll upset the landlords.

IveSeenTheLight

DervProf wrote: »

Shhhhhh ! You`ll upset the landlords.

Not really, property investment is shown to be a better vehicle than simply putting your money in a savings account, even without HPI

HPI is only a bonus.

DervProf

IveSeenTheLight wrote: »

Not really, property investment is shown to be a better vehicle than simply putting your money in a savings account, even without HPI

I might argue that this isn`t true in all cases.

In fact, yes, I will argue that fact.


And I`ll also debate the "without HPI" thing too, if you like.

Let battle commence.