Is interest-only really a ticking time-bomb?

RenovationMan

Thrugelmir wrote: »

Besides which savings into pension plans are falling.

I'll take your word for that, though if it is true then that's probably because people are putting money onto their mortgages. I know that it used to make me despair when people on the MFW board were deferring pension payments in order to pay off their mortgages.

The benefit of using a pension this way is that the government is helping you pay off your mortgage to the tune of a 20%, 40% or 45% tax rebate (depending on your income tax thresholds) with perhaps some hefty input from an employer. Plus knowing you need your pension to be substantial, it will focus the mind and ensure you put money away. Someone with a £600k pension will be set for a comfortable retirement - there is no doubt of that!

Thrugelmir

RenovationMan wrote: »

'll take your word for that, though if it is true then that's probably becauseI people are putting money onto their mortgages. I know that it used to make me despair when people on the MFW board were deferring pension payments in order to pay off their mortgages.

Latest BOE report indicated that there was no significant indication of borrowers overpaying their mortgage. Though with a starting point of £1,200 billion total debt. A few quid here and there isn't going to make of an impact. The majority of mortgage reduction is coming from redemptions.

The Pensions Commission's concerns about private pension saving are supported by recent evidence from the DWP's Family Resources Survey. This research highlighted a gradual decline in private pension saving over the last 10 years, with a particular decrease among two demographic groups; men of all ages and people under 40. The survey found that in 2009-10 only 38% of working-age people—11.6 million out of 30.4 million people[14]— were saving into a private pension, compared with 46% in 1999-2000. Over the same period, pension saving among men fell from 52% to 39%, and among individuals aged between 20 and 39, from 43% to 31%.

http://www.publications.parliament.uk/pa/cm201012/cmselect/cmworpen/1494/149405.htm

robmatic

Thrugelmir wrote: »

Have you calculated the monthly contribution required to build a £600k pension pot. In order to repay a £150k mortgage?

Besides which savings into pension plans are falling.

It's not so hard if you work in the public sector...

Bigdeflationfirst

abaxas wrote: »

The problem is that either are stuck with the deal they have and must repay at end of term.

It is assumed they can refinance at end of term, but that is not guaranteed.

Also all those who got free solar panels fitted are now regretting it.

They had to get it approved by their mortgage company to start with before renting out their roof for 25yrs. But when they come to remortgage they get refused.

Computer says no.

What can they do, they have to buy their roof back another 15K, or try and sell their property to a cash buyer, because no one can get a mortgage on it either.

Graham_Devon

Bigdeflationfirst wrote: »

Also all those who got free solar panels fitted are now regretting it.

They had to get it approved by their mortgage company to start with before renting out their roof for 25yrs. But when they come to remortgage they get refused.

Computer says no.

What can they do, they have to buy their roof back another 15K, or try and sell their property to a cash buyer, because no one can get a mortgage on it either.

Is this for real? Houses with solar panels on the roof installed for free are unmortgageable!?

nearlynew

Graham_Devon wrote: »

Is this for real? Houses with solar panels on the roof installed for free are unmortgageable!?

Sure is.

Have you seen the terms and conditions?

Graham_Devon

nearlynew wrote: »

Sure is.

Have you seen the terms and conditions?

Missed out on that pleasure.

nearlynew

Graham_Devon wrote: »

Missed out on that pleasure.

Well, let me summarise it for you Dev...

Some bunch of lying thieves promise you can have loads of free lecky if you rent them your roof for 25 years. If you want to sell your house within 25 years, your buyer's lenders don't like the idea that someone is renting the roof so they won't lend the money to buy your house.

Graham_Devon

nearlynew wrote: »

Well, let me summarise it for you Dev...

Some bunch of lying thieves promise you can have loads of free lecky if you rent them your roof for 25 years. If you want to sell your house within 25 years, your buyer's lenders don't like the idea that someone is renting the roof so they won't lend the money to buy your house.

B'stard banks.

michaels

Isn't it a stocks and flows things - a direct consequence of activity levels below average is that outstanding mortgage debt will fall - especially as the average time to maturity will also be falling so the proportion of fixed monthly payments that are capital rather than interest will increase - simply an impact of the maths but may be it has economic consequences?

Thrugelmir wrote: »

Latest BOE report indicated that there was no significant indication of borrowers overpaying their mortgage. Though with a starting point of £1,200 billion total debt. A few quid here and there isn't going to make of an impact. The majority of mortgage reduction is coming from redemptions.



http://www.publications.parliament.uk/pa/cm201012/cmselect/cmworpen/1494/149405.htm