House prices suffer biggest drop since 2009 - Nationwide -2.6%

System

If you'd just said "4% of the way through the term" we could have saved 3 pages.

RenovationMan

Generali wrote: »

Perfectly true.

However, someone that bought "a year ago" will have repaid nothing like 4% of the sum borrowed. It's one of the reasons why lending to FTBs is so risky that it has been pretty much outlawed under Basle III: if you think the current mortgage restrictions are tough then you ain't seen nothin' yet if Basle III comes in unaltered, the cost of a 95% LTV mortgage should be about 5x higher than that of a 60% LTV mortgage.

A usually find a 'mae culpa' works better than backtracking when I've has posted in haste without working out the sums but if arguing the toss works better for you then feel free to carry on. Hamish's method of not posting for the rest of the day is pretty effective too

It's fine Gen, I knew exactly how mortgages work before I posted, having posted links several times to loan amortization calculators to help people to see how much they have/or will have paid off their mortgages. An example of which is below:

RenovationMan wrote: »

You use a loan amortization calculator to see what your monthly loan repayments would be based on the loan (mortgage) balance, term and interest rate: http://www.amortization-calc.com/

As I keep saying, the only way to universally say how much a mortgage can reduce by each year is to use the mortgage term. In my case I used 25 years and divided it by 100% to give 4%.

I keep saying this and no one pulls me up on it, but you're an honest bloke and so we can put this to bed at last.

so, is the following statement wrong?:

"The average repayment each year over the lifetime of a 25 year mortgage is 4%".

RenovationMan

Joeskeppi wrote: »

If you'd just said "4% of the way through the term" we could have saved 3 pages.

I know,I made the mistake of forgetting that posts on this forum have to be written to the legal standard of contracts. Next time I post, I'll run it past a Lawyer! :rotfl::rotfl:

Still, it passes the time.

Generali

ash28 wrote: »

Well the Halifax have a far bigger market share

They do. They also have a methodology that, by their own admission, is highly susceptible to large changes in volumes.

chewmylegoff

RenovationMan wrote: »

Erm, yes. It is impossible to give a universal calculation that covers every mortgage holder. Clearly you can do this individually, but that's the whole point - it's unique to individuals. The only calculation you can therefore give is based on the duration of the loan (25 years in this case).

There is another calculation you can do, and that calculation says that whatever the interest rate is (assuming that interest is applied of course) the capital element of the normal repayments in the first year of a 25 year mortgage will definitely be less than 4% of the total mortgage amount.

the_flying_pig

RenovationMan wrote: »

The interest rate has no impact on the 4% because interest is separate from the actual loan...

well [apologies if i misunderstand you] -

if the interest rate is zero then a £100k, 25 year repayment mortgage will cost you £4k p.a., & the amount that you owe will go down by £4k p.a. right away.

similarly if the interest rate is 100% then a £100k, 25 yr repaymenet mortgage will cost you £100k p.a. & you'll only pay off any capital right at the end of the mortgage.

any interest rate between 0% and 100% falls somewhere between these two extremes.

homelessskilledworker

Treadstone2.0 wrote: »

And this is before the Omyplics when everything is inflated. What about when everyone goes home freeing up all that empty property?

That is not entirely true, now that a momentum has began in that area(which was a major s***hole) I cannot see it stopping. All the rubbish has now be flattened and the Olympic park in all it's glory now stands there with a further 350 acres waiting to be built on.

It is now a place to go rather than avoid

RenovationMan

the_flying_pig wrote: »

well [apologies if i misunderstand you] -

if the interest rate is zero then a £100k, 25 year repayment mortgage will cost you £4k p.a., & the amount that you owe will go down by £4k p.a. right away.

similarly if the interest rate is 100% then a £100k, 25 yr repaymenet mortgage will cost you £100k p.a. & you'll only pay off any capital right at the end of the mortgage.

any interest rate between 0% and 100% falls somewhere between these two extremes.

Sorry, I have no idea what you are trying to prove here and how it disproves my "average repayment over 25 years term is 4% per year" statement.

Mallotum_X

RenovationMan wrote: »

Sorry, I have no idea what you are trying to prove here and how it disproves my "average repayment over 25 years term is 4% per year" statement.

Give it up already. You made a badly phrased casual remark, that you were quite rightly picked up on, accept it and move on instead of spamming the forum all day over it.

RenovationMan

wotsthat wrote: »

Don't know if it helps but I've paid off 3.9% of my mortgage in the last year.

I've paid off 16.67% of my mortgage in the first 2 years of having it.

Cue outraged posts from DervProf et al about me posting my financial info on the internet. :rotfl: