5 Ways to reduce your mortgage payments ?, for a NEW property/new mortgage

shortchanged_2

How many stories have we heard on here from people who started off on IO with the intention of going onto repayment and then found out they can't afford to. So then what? All the time the debt becomes more unmanageable as they have less time to pay the capital debt, therefore monthly payments if reverting to repayment get bigger all the time.

Basically if someone can't afford a repayment mortgage from the start it means that someone can't afford a repayment vehicle either therefore an IO mortgage is definately not suitable for them.

There are so many if's and but's like I will be earning more in a few years blah, blah but it doesn't always work out like this does it. People need to be sure they can afford a repayment mortgage or the equivalent from the beginning.

grey_gym_sock

yes, there is a world of difference between ppl who can make large overpayments on a repayment mortgage, and ppl taking out an IO mortgage because they can't afford a repayment 1.

JimmyTheWig

drioiderm's (reasonably valid) point is that the people who can't afford a repayment mortgage will be the same ones who can't save for a deposit while renting.

Mrs_Z

"But if it's being suggested that people save a 25%+ deposit (or whatever), then surely they would be in a position to overpay a similar amount?"

In theory - yes, but how many will diciplined enough to do so? There are enough temptations out there; new car, holidays, kids, etc than ploughing money into (boring) mortgage payments..... Especially intoday's climate when theres a trend with young people wanting and getting everything NOW and not having to save and wait for it.

'Good intentions' often are just that....