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marathonic

Graham_Devon wrote: »

ISTL. You are talking about investments.

Marathonic is calculating the financial difference between buying or renting a home.

He has ignored the balance of the mortgage. No calculations for repayment and no sum set aside to pay it off.

It's a flawed calculation. I know we disagree on almost everything, but surely this we can agree on. The calculations have ignored 80 odd thousand pounds.

I understand what you are talking about when looking at investments, but that's not what the calculations were about.

As for repeating myself, I know, my laptop went mental and seemed to go back and forward several pages. Seems it added my posts again.

I know my calculations ignore repayment of capital - AS THEY SHOULD.

There is money set aside for capital repayment because I'm on a capital repayment mortgage. However, comparing the total payment to renting isn't a valid comparison -the renter ends up with nothing, I end up with a mortgage-free house.

Graham_Devon

marathonic wrote: »

I know my calculations ignore repayment of capital - AS THEY SHOULD.

There is money set aside for capital repayment because I'm on a capital repayment mortgage. However, comparing the total payment to renting isn't a valid comparison -the renter ends up with nothing, I end up with a mortgage-free house.

Oh this is just insanity.

Can this get any more pointless?!

To end up with a mortgage free house, you HAVE to pay your mortgage, not just the interest!!

I'm lost for words.

marathonic

Graham_Devon wrote: »

1. You will really struggle to get an interest only loan. It's quite likely that you'll find it almost impossible. So what really is the point in calculating on this basis?

Because comparing on any other basis is a pointless comparison. Go speak to any financial advisor, or anyone with a good understanding of mathematics, and see how they think a comparison like this should be done. I don't have the time or inclination to continue with it.....

2. You will still need to repay the balance at some point - it simply cannot be ignored.

Of course it cannot be ignored in real-life, but for the purposes of a valid comparison between renting and buying, it MUST be ignored

Answers in red above.... Good night!

Graham_Devon

marathonic wrote: »

Answers in red above.... Good night!

Either you have had REALLY bad financial advisers, or you are fantasising.

We've seen some vague calculations on this site before, but ignoring the capital completely takes the biscuit. Best yet!

IveSeenTheLight

Graham_Devon wrote: »

ISTL. You are talking about investments.

LOL, no, I separated my points.

Once again, this is nothing to do with investments, just between buying a home to live in and to rent

Originally Posted by IveSeenTheLight
If you want to calculate roughly the difference between buying and renting go here
http://www.greengem.co.uk/Rent_V_Buy/rent_v_buy.php

Happy figure playing

IveSeenTheLight

marathonic wrote: »

Answers in red above.... Good night!

He must be deliberately muddling.

The amount of times it's explained.

the natural response is he wants to compare his apples with his oranges deliberately as he knows that a like for like comparison disproves his point.

marathonic

Graham_Devon wrote: »

Oh this is just insanity.

Can this get any more pointless?!

To end up with a mortgage free house, you HAVE to pay your mortgage, not just the interest!!

I'm lost for words.

One more reply before bed - so, to end up with a mortgage-free house, I have to pay my mortgage, not just the interest.

Does that mean that, if a capital repayment mortgage over 30 years costs £153 per month more, then, as you so confidently state above, the figures will skew towards the renter? NO

Over 30 years, that £153 per month, or £55,274 in total, results in me owning a house worth £115,000....

If you can't do the math, let me do it for you:

£115,000 > £55,274


http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

Graham_Devon

marathonic wrote: »

One more reply before bed - so, to end up with a mortgage-free house, I have to pay my mortgage, not just the interest.

Does that mean that, if a capital repayment mortgage over 30 years costs £153 per month more, then, as you so confidently state above, the figures will skew towards the renter? NO

Over 30 years, that £153 per month, or £55,274 in total, results in me owning a house worth £115,000....

If you can't do the math, let me do it for you:

£115,000 > £55,274


http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

You are missing 30 odd k.

You took a mortgage out for over 80k. You have decided to repay 55k. Wheres the 30k gone?

Can't quite believe you are backing this up ISTL. To try and make ME look stupid when you are ignoring the capital repayment completely and assuming you own the house at the end mortgage free is quite something.

To sum up:

1. We have to ignore the fact that interest only mortgages for residential buyers no longer exist and pretend they do.

2. We have to ignore the capital completely, but assume the house will be mortgage free by the end of the term.

And at the end of that, we can prove that renting is more expensive that buying a house, ignoring the capital and ignoring the fact you can't get the product used to calculate this.

And I'm muddling things. Rigggghhhht.

marathonic

Graham_Devon wrote: »

You are missing 30 odd k.

You took a mortgage out for over 80k. You have decided to repay 55k. Wheres the 30k gone?

Can't quite believe you are backing this up ISTL. To try and make ME look stupid when you are ignoring the capital repayment completely and assuming you own the house at the end mortgage free is quite something.

Use the calculator...

My original calculations prove that buying and paying only interest works out cheaper.

You go on to argue that, based on a capital repayment mortgage, the renter is better off.

By using the BBC mortgage calculator, you'll see that the difference in monthly payments for an £86,250 mortgage on an IO basis, when compared to a 2.9% repayment mortgage over 30 years works out at £153.54 per month - or £55,274 over the term.

The difference comes from the fact that, as you pay capital down, the mortgage interest is reduced. Basic, Basic, Basic mathematics.... did I say BASIC....

Graham_Devon

marathonic wrote: »

Use the calculator...

My original calculations prove that buying and paying only interest works out cheaper..

But you CAN'T do that!

You can' only pay interest and own the house at the end of it!

You can't even get an interest only mortgage anymore.

Use any calculator you like. Reality is somewhat different. I actually feel a little sorry for you now as you seem genuinely convinced by your calculations which cannot exist in the real world.

It's desperation beyond all belief to attempt to "prove" renting is more expensive than buying by using products which don't even exist and pretending you own the house without even paying off the mortgage balance.

Your sums above still ignore the capital. Add 80k (capital) to your 55k (interest). Theres your total cost.

Pure fantasy.