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Debate House Prices
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Budget 2013 live....
Comments
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It would be a hell of a lot more than £1,700 after 25 years as a result of interest fees. But other than that, yes.So after the 25 years you will owe 20% of the value of house + the 1.5% fee + (RPI+1%) about £1700 in your example.
That makes sense to me we will just have to wait until we see fine print.0 -
Graham_Devon wrote: »Actually feel a little sorry for Danny Alexander on newsnight tonight!
Appears he's let slip that it's all but a certainty that we will link interest rates to arbitrary unemployment targets too. This is regardless of inflation and regardless of 1% pay caps.
Hardly surprising isn't it what they have done in the good old USA. Where they lead we follow blindly.
Public sector workers, don't register, so pay caps don't enter the equation.
They want inflation."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Graham_Devon wrote: »It would be a hell of a lot more than £1,700 after 25 years as a result of interest fees. But other than that, yes.
Why the fee is £630 compounded at 5% is £1700 over 20 years0 -
Graham_Devon wrote: »Actually feel a little sorry for Danny Alexander on newsnight tonight!
Appears he's let slip that it's all but a certainty that we will link interest rates to arbitrary unemployment targets too. This is regardless of inflation and regardless of 1% pay caps.
He got roasted on R4 this afternoon. Asked the question "what if house prices plunge" he couldn't or wouldn't answer. He was pressed for an agonising period of time until the presenter said "our listeners will recognise you didn't answer the question"
I didn't feel sorry for him.0 -
Why the fee is £630 compounded at 5% is £1700 over 20 years
The interest is on the loan, not on the fee. I'm absolutely certain of that!
You are most likely in that it's the fee rate itself which rises by RPI + 1% (therefore is rpi is 4%, the fee rises from 1.75% to 1.84%....yet to be clarified), but it's definitely interest on the loan itself!0 -
Graham_Devon wrote: »The interest is on the loan, not on the fee.
Where does it say that I read that a fee of 1.5% will be leved and that will increase by RPI+1 I haven't read anyware that the fee is RPI + 1 every year0 -
Why the fee is £630 compounded at 5% is £1700 over 20 years
Because the charge is not 1.75% with compound interest applied. It is 1.75% in Y6, then in year 7 it is [Capital+1.75%]x(rpi+1%) etc
So basically a lot more than £1,700. It would be more than £1,700 after 3 years assuming RPI didn't fall below 0.75%.0 -
chewmylegoff wrote: »Because the charge is not 1.75% with compound interest applied. It is 1.75% in Y6, then in year 7 it is [Capital+1.75%]x(rpi+1%) etc
So basically a lot more than £1,700. It would be more than £1,700 after 3 years assuming RPI didn't fall below 0.75%.
Have you got a link showing that0 -
Where does it say that I read that a fee of 1.5% will be leved and that will increase by RPI+1 I haven't read anyware that the fee is RPI + 1 every year
It's an annual fee.
The annual fee will rise each year by RPI + 1%.
After 25 years, you could have pretty much doubled your loan on the basis of 4% each year.
Would certainly hamper moving on, especially with the initial loss on the newbuild anyway. Plus, you wouldn't being paying normal 75% LTV rates. You will be paying higher rates, as per firstybuy and newbuy, both which required specific mortgages at higher rates (normally higher than general high LTV rates).0 -
Where does it say that I read that a fee of 1.5% will be leved and that will increase by RPI+1 I haven't read anyware that the fee is RPI + 1 every year
It is implicitly stated - interest free for 5 years. So after that there is an interest charge every year. First year 1.75%, subsequent years rpi + 1%.0
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