Windfall fears for over 1m interest only mortgage holders

IveSeenTheLight

Thrugelmir wrote: »

Jury is out.

BOI mortgage holders would certainly disagree at the current time.

Ok, on that single post I can see your point.

Over the course of 25 years however.........


One query, since you are attune to the Ireland market.
What's the comparison of rents v's IO mortgage rates?
As mortgage rates reduced and the house price correction occurred, did mortgage payments also reduce?
what happened to rents.

Keen to understand so the Jury can make an appropriate assessment

Thrugelmir

IveSeenTheLight wrote: »

Over the course of 25 years however.........

The FCA said

Nearly half of the loans, which only pay off the interest on the loan and not the capital, face a shortfall averaging 71,850 pounds, with customers "over-optimistic" about their ability to pay, the watchdog said.

Jury may be out for some years. As position worsens after 2020. As mortgages for redemption get larger and larger.

In 2012 average interest only mortgage redeemed was £52k. After 2020 projected average rises to £157k. As post 1998 bubble comes to maturity.

IveSeenTheLight

Thrugelmir wrote: »

The FCA said



Jury may be out for some years. As position worsens after 2020. As mortgages for redemption get larger and larger.

In 2012 average interest only mortgage redeemed was £52k. After 2020 projected average rises to £157k. As post 1998 bubble comes to maturity.

Doesn't answer point I'm afraid.

Assume a property bought at peak for your benefit in 2007.
Would you expect the same property to be worth less in 2032?
What rents would be charges on similar properties over those 25 years as opposed to the IO interest payments?

Graham_Devon

wotsthat wrote: »

Dear oh dear - it's a thread about IO loans. Hamish only used the word 'windfall' to wind up the usual suspects.

Really?

He's gone on to try and explain this further, asking how it isn't a windfall...He's even used calculations. You've backed it up.

Seems you have decided he hasn't actually typed what he has typed at all and have gone on, 4 pages later, to suggest everything typed is just merely a wind up. Don't think so.

the_flying_pig

HAMISH_MCTAVISH wrote: »

...penalising the majority who could benefit from such a thing, is never a good idea....

sorry, "penalising" who? if IO wasn't allowed, would the houses that'd otherwise be bought using an IO mortgage vanish in a puff of smoke?

Thrugelmir

IveSeenTheLight wrote: »

Assume a property bought at peak for your benefit in 2007.
Would you expect the same property to be worth less in 2032?

Do you expect mortgage lending to rise, fall, stay the same?

In overall terms that is, i.e. debt outstanding.

Graham_Devon

IveSeenTheLight wrote: »

Doesn't answer point I'm afraid.

Assume a property bought at peak for your benefit in 2007.
Would you expect the same property to be worth less in 2032?
What rents would be charges on similar properties over those 25 years as opposed to the IO interest payments?

ISTL... How many people rent, privately, without housing benefit, for 25 years?

I'm not asking for absolute figures, just your thoughts really? Handful? A few? Lots?

I know my thoughts, and the only people I know that have rented for even a decade or more are either getting help through housing benefits or are in council housing.

I don't know anyone who's rented for a decade or more privately out of choice.

I'm wondering if you do? And if you care to extrapolate that across the country?

If not...why do we assume people rent for 25 years out of choice to calculate how much better off someone on IO will be?

Seems a very pointless calculation when the group of people you are suggesting IO owners are better off against is incredibly small.

I could quite as easily turn around and calculate that someone who lives with their parents all their life and inherit the house when their parents pass are better off than someone who bought. It's pretty pointless though....although there are such people out there.

HAMISH_MCTAVISH

Graham_Devon wrote: »

How many people rent, privately, without housing benefit, for 25 years?

Very few, because previously almost anyone that could afford the rent could get a mortgage. Be it repayment or I/O.

Now however, mortgage rationing is preventing many people from buying that previously would have.

So the numbers of long term private renters are increasing rapidly.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Very few, because previously almost anyone that could afford the rent could get a mortgage. Be it repayment or I/O.

Now however, mortgage rationing is preventing many people from buying that previously would have.

So the numbers of long term private renters are increasing rapidly.

Right, so as you admit, it's very few.

Yet there are a LOT of people with IO mortgages. And over a million in "trouble".

So why are we "proving" something which rarely even exists?

If you are looking to the future, and looking at people renting today, then the calculations are also pointless.....as regardless of the calculations you make to suggest people would be better off on IO than renting..... IO no longer exists!

So you have swapped one calculation against something that doesn't really exist for another calculation going forward on somethign which doesn't exist.

Meanwhile, wotsthat is trying to tell us this conversation and everything you are saying doesn't exist and were just being wound up.

Of course, this is all to prove you are better off "buying" a house....yet the irony is,your calculations are all reliant on not actually buying it.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Yet there are a LOT of people with IO mortgages. And over a million in "trouble".

Eh?

Where does it say a million are "in trouble"?

If they were really "in trouble" they would be struggling to pay the mortgage.

They're not.

They may have to remortgage on a repayment deal in XX number of years, or they may have to save a bit more, or they may just sell up and take the cash, knowing they've saved a fortune versus renting instead for all these years and got a nice little lump sum at the end.

Complete nonsense, as always Graham.:(