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UKs biggest lender ends IO mortgages without evidence.
Comments
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INT ONLY is the same as captial repayment where the capital pay downs on Int Only are monthly and at least equal in size to those made under a cap rep mortgage.
Some lenders have been asking for repayment vehicle proof for years - customers without one simply open an ISA with £10, job done. There is no compunction to then feed the savings plan and I would generaly advise repaying capital each month is far superior to the ebbs and flows of investment vehicle performance.
The reason some prefer Int Only is the flexibility granted in the event the holder should fall on harder times (less going out per month for a time).
You all should understand that lenders requesting to see an ISA, is merely a case of mechanincal @rsse covering and will have no effect on the market going forward.0 -
RenovationMan wrote: »Q. Ah, but that is what YOU are saying. I thought we were discussing what I was saying?
Sorry, I was jumping the gun a little, and introducing the whole reason this has gone on for so long. I will continue to answer you questions, and try not to make any other points.
Ah Conrad is here, a man who should know a thing or two about what we are discussing.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
RenovationMan wrote: »Q. Ah, but that is what YOU are saying. I thought we were discussing what I was saying?
Getting back to what I was saying...
So if the only difference between an IO mortgage and a repayment mortgage is the Capital Repayments, what is the difference if we strip out the capital repayments?
The cost of the interest paid.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Don't bank on it:p:eek:
:rotfl:
Seriously, please stay with us, your advice may be required.
And let's just try to keep it between me and RM until other opnions are needed.
Thanks.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
RenovationMan wrote: »So if we strip out the repayment part of a mortgage, we are left with the interest only part. Which on my mortgage is £573.75.
Yes, I agree.
I'll just grab a:coffee:
This is more like it !30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
RenovationMan wrote: »So to check our figures...
Repayment mortgage: £1596.48, consisting of £573.75 Interest Part & £1022.73 Repayment Part.
Interest Only mortgage: £573.75, consisting of £573.75 Interest Part.
Are we ok so far?
Fine. It's a nice day, and I'm agreeing with you (so far
). 30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
RenovationMan wrote: »So if we strip out the Repayment Part (£1022.73) we have:
Repayment Mortgage (with repayment part stripped out): £573.75
Interest Only Mortgage: .............................................£573.75
Those figures look identical to me and so my statement:
"Strip out the repayment part of the mortgage and both [IO mortgage & Repayment Mortgage] will cost the same amount."
Is valid, is it not?
Bingo !!!!!!
It might be valid in your mind, and in my mind (if I don't think about it too much).
However, and here's the crux of the matter.........
A repayment mortgage without capital repayment is not allowed AFAIK (Conrad ?).
Even if it were allowed, a repayment mortgage without capital repayment is an IO mortgage (in all but name).
In the real world, if you had a repayment mortgage, you would have to be making capital repayments, and that would mean that the cost of the mortgage, stripping out capital repayments, would be much different to what you are doing now (unless, as I have previosuly stated) you carefully calculated the overpayments on your IO mortgage.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
!!!!ing hell.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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