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UKs biggest lender ends IO mortgages without evidence.
Comments
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Ah, but it is sensible anything over £16K in savings means should the worst happen (lose job) you get nothing.
So making sure your savings offset gets paid in to you mortgage account rather than sitting in your saving account is a must for sensible planing. (We trigger the savings account at £10K as soon as we hit that we send £7K to go in to the mortgage account, leaving a small gradually increasing buffer in the offset)
What if your savings are significantly higher than £16K, and your mortgage is less than your savings ?
The advice might be "well if you have so much savings, what are you doing having a mortgage ?". My answer would be "flexibility". Should there be an unexpected expense (boiler replacement, new car, time off work etc), then if you've used most of your savings to pay of your mortgage, you might wish you hadn't.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
What if your savings are significantly higher than £16K, and your mortgage is less than your savings ?
The advice might be "well if you have so much savings, what are you doing having a mortgage ?". My answer would be "flexibility". Should there be an unexpected expense (boiler replacement, new car, time off work etc), then if you've used most of your savings to pay of your mortgage, you might wish you hadn't.
TBH if that is the case benefits are not a problem or redundancy so much.
But if your savings rate is below your mortgage rate it is wiser to pay it off.0 -
RenovationMan wrote: »Insurances cover most emergencies anyway. Its unlikely that most people would need more than the equivalent of 3 months worth of outgoings.
If you have paid for insurances, yes.
Insurance can be a good idea for some people. I know a few people that insure themselves against everything they can, others don't bother. I think it's a bit of a gamble. As life is unpredictable, you won't know if insurance was a good idea until the policy ends (or you make a claim).30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
TBH if that is the case benefits are not a problem or redundancy so much.
But if your savings rate is below your mortgage rate it is wiser to pay it off.
If you want the "best of both worlds", you can keep your savings, and still save mortgage interest. Offsetting is a good thing, IMO.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
If you have paid for insurances, yes.
Insurance can be a good idea for some people. I know a few people that insure themselves against everything they can, others don't bother. I think it's a bit of a gamble. As life is unpredictable, you won't know if insurance was a good idea until the policy ends (or you make a claim).
Don't need insurance. We have taxpayers and SMI.
Which kinda proves your point. In general, people don't take insurance. And if they do, in many cases, clauses catch them out.0 -
Graham_Devon wrote: »Don't need insurance. We have taxpayers and SMI.
Which kinda proves your point. In general, people don't take insurance. And if they do, in many cases, clauses catch them out.
Well, I wouldn't say that a majority of people have trouble with insurance claims (well I wouldn't know for sure), but I do know a few people that lost out on fairly large claims.
I wouldn't say don't take insurance. I'd say look at your own risks, then if you want to take out insurance, make sure you read the small print, carefully.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
TBH if that is the case benefits are not a problem or redundancy so much.
But if your savings rate is below your mortgage rate it is wiser to pay it off.
Here's a good example of how to use offsetting.
Lets say you have £100K in the bank, and you want to buy a property for ~£100K (could be any other amount for that matter).
You could pay cash, put down a large deposit, put down a small deposit.
I think a shrewd idea would be to put down the small deposit, take an offset mortgage, and put the remaining £90K(?) into the offset account. You could even set up a standing order to use the saving to pay the monthly mortgage. You'll only be attracting interest on about £10K, so you have a very cheap mortgage, no matter what the mortgage rate is. Should you want to spend some money, say on rennovations, you can use some of the offset money. Yes, that will mean you start to attract more interest on your mortgage, but if you then are able to save some more money (say you get a bonus at work), you can "top up" the offset account and reduce the amount of interest you are being charged. You could even pay no interest by having more savings than the outstanding balance of your mortgage, and the good offset lenders will pay quite competitve rates of interest on any savings that exceed your outstanding mortgage.
* I realise that any money being used for offsetting is not attracting any interest, so you are losing out in that respect. as most mortgages (especially offset ones) have higher interest rates than savings accounts, then you are still on a winner.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
typical frothing - maybe if you could understand the small print you'd understand what an insurance policy actually was.Graham_Devon wrote: »Don't need insurance. We have taxpayers and SMI.
Which kinda proves your point. In general, people don't take insurance. And if they do, in many cases, clauses catch them out.
this thread was doing so well without the likes of Mr Muddle...0 -
typical frothing - maybe if you could understand the small print you'd understand what an insurance policy actually was.
this thread was doing so well without the likes of Mr Muddle...
Although Graham's point could be viewed as being slightly "frothy", I don't think it can be dismissed out of hand. The first sentence, a bit of froth, the second has merit (not just because he agreed with me).30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
I have something to say about health insurance, but I have work to do, so will try to remember to post when I return. I think it's an interesting point, and might provoke a decent debate.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
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