House ownership - Selling yourself into a lifetime of servitude

ukcarper

If you took out a 100% interest only mortgage to buy an average house 25 years ago it would have been £35k. So if you still had that debt and had to finance it at lets say 6% it would cost you £175 a month pretty cheap rent I would say. If you change mortgage to 15-year repayment it would cost you just over £300 a month at 6%. So although not a good idea it’s still better than paying the average rent of over £600.

nembot

Pete111 wrote: »

How on earth do you know what their circumstances are?

We've bought in the last 4 years and we are on an IO mortgage. Last I checked I didn't detail a specific 'repayment plan' to the bank (yes, even in the dark days of 2009 when we remortgaged)

However, even without such a 'plan' we've somehow paid off 50% of the mortgage in that time and,the remortgage dropped our (fixed) interest rate to 3.8% from the original 5.2%.

Accordingly I now pay approx £600 a month to live in a four bed detached house within a short train ride to London. To rent my house would cost £2k a month minimum. And I know this because we are talking about going travelling and letting it for a year so we got an EA round to have a looksee. (oops forgot I was apparently 'tied' to it there for a mo...)

As such, I'm really struggling with this 'owning a house makes you a slave' cobblers. TBH I've never paid so little to live so comfortably!

To be fair, what you've achieved as impressive as it is... is hardly typical of the average buyer now is it?

Where'as my statement is based on data in the public domain, in which allegedly the majority of people with IO mortgages have no repayment vehicle at all - even the FSA are getting involved to stop this continuing.

In fact, you can start your search in the news section of this website.

nembot

IveSeenTheLight wrote: »

Arguably, IO buyers are in a stronger position than renters as they are less likely to be moved on, can decorate, have pets etc

Fair comment ISTL, but there are long term rentals around. Admittedly with some overstretched BTL landlords, you're correct in terms of more people having to vacate property due to repossession etc.

See House Buying/Renting forum...

IveSeenTheLight

nembot wrote: »

Fair comment ISTL, but there are long term rentals around. Admittedly with some overstretched BTL landlords, you're correct in terms of more people having to vacate property due to repossession etc.

See House Buying/Renting forum...

I think the amount of BTL LL's that have property reposessed would constitute a minute amount.

Have you got any proof that this is in fact a significant effect on renters?

People could be moved on for a number of reasons.

You focussed on that point but didn't make any comment on the decoration / pets etc

Pete111

nembot wrote: »

To be fair, what you've achieved as impressive as it is... is hardly typical of the average buyer now is it?

Where'as my statement is based on data in the public domain, in which allegedly the majority of people with IO mortgages have no repayment vehicle at all - even the FSA are getting involved to stop this continuing.

In fact, you can start your search in the news section of this website.

Ok yes, I appreciate we have been making far larger repayments than many would be able to - however there will be others in a similar boat. to us. Your comment was pretty sweeping.

As an example, even without making a single overpayment in the last 2 years we would have saved well over 10k due to the lower interest payments available when we remortgaged. The low base rate will have gifted such a windfall to loads of others, many of whom will have benefitted far more than we (we are not on a tracker) and they will be taking this extra money and repaying mortgage capital.

In fact, I believe repayments on mortgages reached a record high earlier this year. It's probably in the MSE news section too...

pinkteapot

14 pages in... Hands up all those who agree with debtistheft's viewpoint.

If you can't convince people of your argument after 14 pages, it's time to let it go and agree to disagree.

LittleMissAspie

I'll never understand why people refer to mortgages as millstones and the like. Mortgage = 25 year millstone. Rent = lifetime millstone. The point of buying for me is get mortgage-free as soon as possible so that I will never be at risk of losing my home and to free up the money that is currently going on mortgage payments (and used to be going on rent).

nembot

IveSeenTheLight wrote: »

I think the amount of BTL LL's that have property reposessed would constitute a minute amount.

Have you got any proof that this is in fact a significant effect on renters?

Yes, see House Buying a renting forum...

You focussed on that point but didn't make any comment on the decoration / pets etc

I'm renting and pets aren't a problem or decorating and never have been although I've only rented for 3 years, to move closer to work.

debtistheft

If you have to get yourself into hundreds of thousands of £'s worth of debt just so you can have a pet or throw a bit of magnolia around then you probably deserve to spend your life in debt. Looks like the bears win again!

IveSeenTheLight

nembot wrote: »

Yes, see House Buying a renting forum...

Hmmm, there are currently 241 viewers of which: -

1. Not all are tenants (some are buyers and some are renters)
2. Of those tenants, not all are being evicted
3. Of those being evicted, not all will be because their LL is being repossessed.

Please tell me this is not your proof that it has a significant impact as a proportion?

Of course if you mean individually it can have a personal impact, I can agree, I'm just questioning how many and what the percentage is.