UKs biggest lender ends IO mortgages without evidence.

geneer

chucknorris wrote: »

It's ok the shrewder folk on here would have realised that.

The shrewder folk are still wondering what the point was.

geneer

HAMISH_MCTAVISH wrote: »

Absolutely False.
Had I rented instead of buying from 2007 until today, I'd be many tens of thousands of pounds worse off.

Jesus. That must have been some rent you were paying.

Though maybe its just your maths thats wrong.

HAMISH_MCTAVISH wrote: »

Even on a national average basis, when comparing buying versus renting on like for like properties since 2007 and including the price falls, a buyer with a tracker mortgage is now at breakeven with the renter.

Remember, time and low interest rates are the enemy of housing bears.

So people have benefited from the emergency base rates made neccesary because of the global financial crisis they utterly failed to see coming.

Thats nice and all that, but which aspect of that justifies your continually reitterated escapades of self agrandisement.

I mean we're all tickled when paul the octopus's random fish eating happens to co-incide with the results of a couple of footy games.
But I can't say we were hailing him as a world leading expert in statistical sports analysis.

Thrugelmir

There are no doubt other issues behind this move. As LLoydsHBOS has to reduce its share on the UK mortgage market to comply with EU directives. The recent banking report also wants to see less domination by LLoyds in the UK retail consumer banking sector. Finally Lloyds still has a sizable amount of debt to refinance to repay the Government under the SLS scheme. The bulk of which was used directly to fund HBOS's residential and commercial lending portfolios. So a reduction in its total mortgage lending book by shifting the emphasis on to repayment mortgages seems a sound longer term strategy.

DervProf

RenovationMan wrote: »

Nothing that couldnt go wrong for anyone else, regardless of whether they had an interest only mortgage or a repayment. Do you really think that if I had taken out a £300k repayment mortgage I would somehow be financially safer than with a £300k interest only mortgage?

You might be a bit safer, should you hit financial difficulties in the future (depending on what you've done with the money that didn't go towards repayments). I wasn't saying that IO was a worse decision. I was commenting on the assumptions that you were making. You made it sound like it was a done-deal, rather than this was your plan if everything works out as you hope it will.

HAMISH_MCTAVISH

geneer wrote: »

Jesus. That must have been some rent you were paying.

Nope. Just based on typical rents for similar houses in Aberdeen..... Not that I'm stupid enough to pay rent.

And we can't all live in our Mum's spare room like you geneer....

Though maybe its just your maths thats wrong.

Try again champ.....

6% rental yield for these houses, versus 2.5% average mortgage interest paid since then.

That's around 14% ahead for the buyer in just 4 years...... Plus HPI of course.....

Call it the best part of £50,000 ahead, versus renting, on a 200K house.

DervProf

RenovationMan wrote: »

When we finish living here in about 20 years we will downsize and the mortgage will be paid off. The remaining equity will buy us a 2 bed retirement cottage outright. No drama, no fuss and no worries.

These assumptions.

Graham_Devon

DervProf wrote: »

These assumptions.

The same assumptions my parents made.

Didn't work out for them. Sure, the equity was there. But illness meant they saw no way in which they could actually buy the house they had lived in for 10 years at the end of the term.

Had to move.

DervProf

RenovationMan wrote: »

We took out an interest only mortgage for £300k in May 2010 without a repayment vehicle in place and without the lender (Santander) bothering to ask about one.

We still dont have a vehicle in place, well not a vehicle in the traditional sense of the word. We simply over pay while the good times roll but if the bad times ever come in we have much less to find for our mortgage. It just seems to be eminently sensible.

When we finish living here in about 20 years we will downsize and the mortgage will be paid off. The remaining equity will buy us a 2 bed retirement cottage outright. No drama, no fuss and no worries.

This edited post ?

My comments about the last paragraph still stand.

I like the idea of overpaying when the times are good. I had a repayment mortgage, but still overpayed when I could (and used offsetting). The sooner I was rid of my mortgage, the better.

BTW. Sorry to hear about your parents Graham. Life often throws a spanner or two in the works.

DervProf

RenovationMan wrote: »

So it really is a 'done deal'. But why not answer your own question and tell me what could go wrong?

Ah, just spotted this comment.

A "Done deal", assuming a lot of things.

DervProf

RenovationMan wrote: »

Thats a shame, sorry to hear that Graham. However, in my case I have income protection insurance that will pay a monthly income if I am unable to work due to illness. The policy pays out until I get better and return to work or until I retire. My employer also has insurance policies in place for long term sickness, incapacity and death in service. I am also a member of a final salary pension that has provision for early retirement due to ill health.

A word of caution. Income protection insurance (like a lot of other insurance) can only be judged when you claim on it. I know of more than one case when someone I knew needed to claim (and I thought they had a good case to claim), only to find out that the insurance company didn't pay out.