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Cash-strapped families switch £60bn-worth of mortgages to interest-only
Comments
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i guess he must mean he had a repayment mortgage and stopped paying capital back and just paid interest. unless it was an offset product that would allow you to do this seamlessly.
i think you'll need him to get him to explain because i don't really understand what he meant then.
Me neither.
We went "around the houses" and I admit that I got a bit confused myself (due to nobody properly engaging in the discussion with me). I know the point I was trying to make, but it was hard to put across, due to all the "noise". I wanted to focus on what he said, but he and others kept drifting off the point. I think that RenoMan was trying to convince himself, more than anyone else, and all I was trying to do was to suggest that what he said was either wrong, or didn't make sense. It turned into quite a "battle".30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
and when you're back explain how they got to £60 billion please because that Devon chap seems to struggle with basic maths...
I might just do that. I admit that I haven't been following that discussion, but might do later.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
it's the same discussion that we were havingI might just do that. I admit that I haven't been following that discussion, but might do later.
two/thirds of 369,370 is about 246,000 that are struggling. fine.and the number of borrowers rose by 369,370.
£60 billion of mortgages is an average of £243,600 per mortgage which is far and beyond an average mortgage of £109,000.
for me either the number of borrowers is struggling is wrong or the £60 billion amount is wrong as i explained to you before with the data being hashed together.0 -
Graham_Devon wrote: »No, this is how the article got to that number.
Quote:Some of those will have been new deals, but FSA sources confirmed the bulk were due to "forbearance" – as banks move homeowners on to more affordable payment plans to avoid defaults.
Although the regulator does not break out precise figures on new lending and "forbearance", the data shows that around two-thirds of the increase came from struggling households.
I realise you are completely blind, so I have highlighted the important words for you in a nice shade of red.
You are obviously being purposely obtuse. For what reason, I have absolutely no idea. But theres something lacking.
Instead of using an FSA 'source' (newspaper code for we've made it up) why not use some data and comment from the CML instead from 12th May? http://www.cml.org.uk/cml/media/press/2914
Selective quotes...There was little change in the level of mortgage payment difficulties in the first quarter of 2011, according to new data released today by the Council of Mortgage Lenders.The total number of mortgages in arrears also continued to fall, and numbers fell in all but the deepest arrears band. At the end of March, the number of mortgages with arrears equivalent to 2.5% or more of the outstanding balance showed an improvement to 166,900 (1.47% of all loans), just under 2% down from 170,000 (1.5% of all loans) at the end of December 2010, and an 11% improvement on the 187,300 (1.65% of loans) a year earlier. On this measure, the first quarter saw the lowest share of mortgages in arrears since the third quarter of 2008.Overall, the prospect of low interest rates for a protracted period should limit the adverse impact on keeping up mortgage payments, despite the increased tax and inflation burden on households.
There are people struggling but £60bn being moved to IO because families are cash strapped is clearly wrong.
Here's a thought. I'm in the situation where I'm trying to maximise the debt on my mortgage by going IO and extending the term. The reason? I can get a better risk free return on my savings than my mortgage provider is charging on my debt. I wonder if there are any other people in this position? As an earlier poster said - it's hard to sleep at night with the worry.0 -
that was a convenient answer when it was exactly the same discussion...
It was a truthfull answer, as I had not been following your discussion with Graham about where the the figures came from.
Having read the part of the article that explains a bit more detail on the figures, they do seem to make sense.
"The FSA disclosed to The Telegraph that, between the onset of the financial crisis in the third quarter of 2007 and the final three months of last year, the value of interest-only mortgages increased by £99bn and the number of borrowers rose by 369,370. Some of those will have been new deals, but FSA sources confirmed the bulk were due to "forbearance" – as banks move homeowners on to more affordable payment plans to avoid defaults.
Although the regulator does not break out precise figures on new lending and "forbearance", the data shows that around two-thirds of the increase came from struggling households."
Now you can argue about what the exact figures are (numbers of stuggling mortgage payers. exact average amount owed by those struggling borrowers), but the numbers and comments supplied by the FSA do seem to suggest that a significant amount of people have moved to IO because of financial difficulties.
As nearly £100bn of IO mortgages have been taken out since 2007, and that nearly 370,000 people took these mortgages, then it does look like around 200,000 people are struggling, and that the amount owed by those people is around £60bn (given that 2/3 of the increase in IO came from struggling borrowers).
Of course, I assume that the newspaper's source is reliable.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
it's the same discussion that we were having
two/thirds of 369,370 is about 246,000 that are struggling. fine.
£60 billion of mortgages is an average of £243,600 per mortgage which is far and beyond an average mortgage of £109,000.
for me either the number of borrowers is struggling is wrong or the £60 billion amount is wrong as i explained to you before with the data being hashed together.
It doesn't take much thought to conclude that the people that have to switch to IO are likely to have larger mortgages. I can't see what the problem is. Yes, you can argue about the figures (if they are accurate or not), but if you are saying that people who are struggling with their mortgages and have switched to IO should have average sized mortgages, then I'd disagree.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Any comment, chucky ?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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Wot no chucky?0
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