Mortgage lending up on a year ago, says CML

RenovationMan

Mr._Pricklepants wrote: »

Not really.
It's got nothing to do with freebies and benefits. It's a balancing act. On one hand, the state collects less stamp duty obviously. But on the other hand, more taxes are collected with a buoyant housing market due to increased spemding on consumer goods, diy, etc...
Now is the time we can start collecting both, a sign of a recovering housing market.

Plus tax is collected from estate agents, solicitors, removal firms and mortgage lenders. A lot of money is injected into the economy from the housing market.

shortchanged_2

RenovationMan wrote: »

Well the strictest provider is Santander at the moment (my current provider) and they're saying that only 50% LTV can be interest only. I'll have hit 50% when the time comes to remortgage. No problems there then.

Interestingly, if I had taken out a repayment mortgage in May 2010, an amortization calculator came up with the following:

Year.....Interest...Principal...Balance
2010.....£5,032....£6,458.....£293,541
2011.....£7,341....£9,894.....£283,647
2012.....£7,087.....£10,148...£273,498

So by the end of 2012 I would have repaid £10,148 with a repayment mortgage, yet with an interest only mortgage, I've already repaid £50k and it's not even March yet.

You can also overpay a repayment mortgage you know.

AndyGuil

Mr._Pricklepants wrote: »

Not really.
It's got nothing to do with freebies and benefits. It's a balancing act. On one hand, the state collects less stamp duty obviously. But on the other hand, more taxes are collected with a buoyant housing market due to increased spending on consumer goods, diy, etc...
Now is the time we can start collecting both, a sign of a recovering housing market.

There is no money left in the pot for this generousity by the government. They are under pressure to cut everywhere. The stamp duty relief was ineffective for the cost.

CRASH_BANG_WALLOP

RenovationMan wrote: »

Plus tax is collected from estate agents, solicitors, removal firms and mortgage lenders. A lot of money is injected into the economy from the housing market.

dude loads is lost too because people are struggling to pay the mortgage they took out to buy a costly house and these same dudes cant spend on other things

CRASH_BANG_WALLOP

Mr._Pricklepants wrote: »

Stamp duty holiday was introduced to kick start the fledgling FTB business. It's a sign of a significantly improving market that the stamp duty holiday is not extended.

David "Hello, George?"

George " Hello David"

David " you better stop the stamp duty scheme dude"

George "why David?????"

David "Its getting too successful and is helping the housing market"

George" Did you take your medication today dude?"

RenovationMan

shortchanged wrote: »

You can also overpay a repayment mortgage you know.

Yes but if you're already overpaying, what's the advantage of a repayment mortgage over an Interest Only one?

Mr._Pricklepants

CRASH_BANG_WALLOP wrote: »

David "Hello, George?"

George " Hello David"

David " you better stop the stamp duty scheme dude"

George "why David?????"

David "Its getting too successful and is helping the housing market"

George" Did you take your medication today dude?"

You just don't have a clue, do you?

shortchanged_2

RenovationMan wrote: »

Yes but if you're already overpaying, what's the advantage of a repayment mortgage over an Interest Only one?

Well for starters your example is disingenuous because if you put the same amount of money towards a repayment mortgage as an IO the difference would be nowhere near what you state. i.e £10,000 off the balance as opposed to £50,000.

Lets look at your example. I don't know your exact figure so let's look at this.

Say a repayment mortgage for your property at 3.5% is around £1525 a month,
the IO equivalent is £875 a month.

You may well be paying or putting aside £2275 a month towards the IO mortgage, which gives you around £50,000, savings or for overpayment.

If you have the repayment mortgage and pay the same monthly amount as the IO mortgage and put the difference aside there will be about £25,000 to overpay or put in savings to overpay plus you also have the money from that taken off the balance from capital repayment.
Added to this the fact that you would have paid around £26,000 off the balance over the 3 years of the repayment mortgage gives you around £51,000 paid off with a repayment mortgage.

Yes my figures are rough but I'm making the point that the difference is nowhere as great as you make it out to be.

Thrugelmir

RenovationMan wrote: »

Year.....Interest...Principal...Balance
2010.....£5,032....£6,458.....£293,541
2011.....£7,341....£9,894.....£283,647
2012.....£7,087.....£10,148...£273,498

So by the end of 2012 I would have repaid £10,148 with a repayment mortgage, yet with an interest only mortgage, I've already repaid £50k and it's not even March yet.

I make it £26,500.

RenovationMan

Thrugelmir wrote: »

I make it £26,500.

Can you show your working out?