The moral hazard of being kind to the indebted

pqrdef

RenovationMan wrote: »

I'm sorry but I have no idea what you're on about. My 'punter' had £150k mortgage and £30k savings and the question was whether he was more secure remaining like that or paying all of his £30k savings onto the mortgage.

But why is that the question? Many people who are overpaying their mortgages are doing so, not as the alternative to saving the money, but as the alternative to spending the money.

So the question is, is this a good time to overpay the mortgage instead of spending the money?

dtsazza

silvercar wrote: »

Totally agree, but in a moneysavingexpert way, paying down the mortgage and leaving himself with no savings means he can claim SMI and the taxpayers will make his mortgage payments for him.

Now that's moral hazard, moreso than the original post.