Paying the mortgage

michaels

wotsthat wrote: »

If you're on IO without a repayment plan you must be a debt junkie living in fear of the time the ticking time bomb goes off. The usual suspects will blow a gasket if they find out that some people actually think before making financial decisions.

I'm finding the margin between my overpayment savings and mortgage is so low that I'm seriously considering...gulp...paying off some debt!

I do know what you mean, it is hard to earn more than 3% gross instant access these days and the old higher paying legacy accounts are grdually expiring Having said that I am looking to fix for 5 years at 2.49% so it is easy to lock in savings over that period for a guaranteed profit.

Funnily enough most of my savings are cash isas as to me that mimics the risk of the mortgage borrowing but they are not accepted by the lander as a suitable repayment vehicle whereas any sort of S&S isa which could be extemely risky is suitable...similarly my stock market savings are mostly in my pension for tax reasons and these also are not considered suitable whereas the same savings outside a pension wrapper would be. Finally I have equity in other properties (with very low ltvs if mortgaged at all) - again not relevant as a savings vehicle to the mortgage company, whereas a vague promise to donwsize is fine...still it is people like me who make up the stats that the naysayers enjoy working themselves up about so I guess we are doing them a favour.

wotsthat

I remember the good old days when I had c£25k on fee free 0% credit cards sat in the mortgage at 5.68% for years.

Life's just not been kind to us savers.

grizzly1911

CLAPTON wrote: »

let the market correct the situation

if there are acute shortgage of nurses / police / teachers / clearners / shop workers / utility workers etc that can afford London prices then the wages (or equivalents ) of those workers will rise and/or rich people will flock out of London because of the lack of basic security or facilities.

How long will this correction take 5 years/10 years >>> whilst people on both sides of the equation suffer?

CLAPTON

grizzly1911 wrote: »

How long will this correction take 5 years/10 years >>> whilst people on both sides of the equation suffer?

London doesn't have a shortage of nurses, police, utility workers, cleaners etc so there isn't yet a problem to 'solve'

but once there is a shortage of staff the private sector will respond within weeks / months: the public sector will probably think about the problem for a few years

so no misery unless the government fails

grizzly1911

michaels wrote: »

I do know what you mean, it is hard to earn more than 3% gross instant access these days and the old higher paying legacy accounts are grdually expiring Having said that I am looking to fix for 5 years at 2.49% so it is easy to lock in savings over that period for a guaranteed profit.

Will you achieve a guaranteed profit or any profit after tax?

Where are you looking at placing it other than 123 account(s) that provides FCSC protection? Looks like rates have even further south to go.

If you are using a fixed deposit won't that tie up your "liquidity pool"?

Glad you made a profit in the past shame those historic fixes, even as recent as the end of 2012, are no longer available to any of us.

grizzly1911

CLAPTON wrote: »

London doesn't have a shortage of nurses, police, utility workers, cleaners etc so there isn't yet a problem to 'solve'

but once there is a shortage of staff the private sector will respond within weeks / months: the public sector will probably think about the problem for a few years

so no misery unless the government fails

That is truly great news. G4S and Serco to the rescue.

So are police, NHS and teachers being privatised? Who will pay for them? Will there be seperate services for the rich and a scutter service?

Misery seems quite probable then.

CLAPTON

grizzly1911 wrote: »

That is truly great news. G4S and Serco to the rescue.

So are police, NHS and teachers being privatised? Who will pay for them? Will there be seperate services for the rich and a scutter service?

Misery seems quite probable then.

What a load of rubbish

1. there isn't a problem with recruitment in London in either the public or private sector

2. Most public sector workers in London benefit from 2 types of financial help compared with their colleagues that live in cheaper areas.
a. London weighting
b. generally better promotion prospects and faster progression through salary grades

3. If London become too expensive for either private or public sector then jobs will move out of London to cheaper areas.
Whilst many will see this as a positive I know you will see this as a negative.


I'm very surprised that you think the private sector would be able to do the public sector jobs more cheaply and be able to recruit staff but then that's your view; I'm not sure I agree.

wotsthat

grizzly1911 wrote: »

Will you achieve a guaranteed profit or any profit after tax?

Where are you looking at placing it other than 123 account(s) that provides FCSC protection? Looks like rates have even further south to go.

If you are using a fixed deposit won't that tie up your "liquidity pool"?

Glad you made a profit in the past shame those historic fixes, even as recent as the end of 2012, are no longer available to any of us.

It's the beauty of IO especially if the mortgage is flexible and on a low fix.

If the mortgage rate is higher than the savings rate then you leave the cash in the mortgage account.

At the point an opportunity arises (and it will) to make a return on cash you take the money out of the mortgage start counting the free money.

grizzly1911

wotsthat wrote: »

It's the beauty of IO especially if the mortgage is flexible and on a low fix.

If the mortgage rate is higher than the savings rate then you leave the cash in the mortgage account.

At the point an opportunity arises (and it will) to make a return on cash you take the money out of the mortgage start counting the free money.

Do they offer offset mortgages at the same rates or are they more expensive?

grizzly1911

CLAPTON wrote: »

What a load of rubbish

1. there isn't a problem with recruitment in London in either the public or private sector

2. Most public sector workers in London benefit from 2 types of financial help compared with their colleagues that live in cheaper areas.
a. London weighting
b. generally better promotion prospects and faster progression through salary grades

3. If London become too expensive for either private or public sector then jobs will move out of London to cheaper areas.
Whilst many will see this as a positive I know you will see this as a negative.


I'm very surprised that you think the private sector would be able to do the public sector jobs more cheaply and be able to recruit staff but then that's your view; I'm not sure I agree.

I never said the private sector would be cheaper you suggested they would fill the void.

Does the public sector London weighting adequately compensate those working in London? Who does the lower graded jobs? Do they inverse pyramid job structures in which to place all the rapidly promoted staff?

What will happen when reduced benefits start to take effect?

So the people that can't afford to live and work there will move out, will they take the patients and students with them?

You are wrong I would see moving out of London as a positive but I am sure many like it there and would be disappointed at being forced to move for economic reasons.