4% isa help to buy

50Twuncle

Why should new buyers benefit from such advantageous ISA rates as currently being offered in the Help to Buy scheme - 4% + an extra 25% when cashed in ?

When I bought my first house in 1987 - I struggled to pay the mortgage repayments which were huge (interest rates were close to 20% - yet I received no financial aid at all,

The best that I can get in a "normal person" ISA is about 2%......

someone

Because
1) The government has deemed this group of people in need of assistance.
2) Banks want/need to compete for business in this key area

in 1987 you would have had "Mortgage interest relief at source" (MIRAS) which nolonger exists. As per the wikipedia entry

MIRAS, was a scheme introduced in the United Kingdom by Chancellor of the Exchequer Roy Jenkins in 1969 [1] in a bid to encourage home ownership; it allowed borrowers tax relief for interest payments on their mortgage.

Archi_Bald

If you are serious with wanting to compare 1987 and 2015, please look at all the factors and not just those that - falsely - suggest it was as hard, or harder, to be a first time buyer in 1987 as it is now. I bought my first house in 1988, btw.

If "a normal person" wants to get 4%, or 5% or 6% for their savings today, they can easily get that, and they won't be limited to a paltry £200 a month like HTB ISA savers are.

YorkshireBoy

You've benefitted from a massive increase in your property value(s) since then (probably quadrupled?), meaning that the same house is not possible for today's first timers...and even with the 25% (max £3K) boost!

NB, the interest rate is set by Halifax. Only the 25% is set by HM Government.

I bought my first house in 1982 for £16,800 and sold 12 years later in 1994 for £50,000. My max mortgage interest rate during that time was in the first year at 16% (non-endowment rate was a little cheaper at 15.5%, but I thought cheaper repayments were better!).

So I'm not sure where your "near 20%" figure comes from? Perhaps your memory is playing tricks?


And one other 'stunner' for you. Back in 1982 the path to a building society mortgage was to prove to them that the mortgage was affordable to you. You did this by saving each month in a society savings account. I distinctly remember saving the thick end of £200 a month (between us) for well over a year with the then Huddersfield & Bradford (now YBS) Building Society before being granted the £191 a month mortgage (£15K after £1,800 deposit @ 16% interest).

colsten

50Twuncle wrote: »

Why should new buyers benefit from such advantageous ISA rates as currently being offered in the Help to Buy scheme - 4% + an extra 25% when cashed in ?

Why do you ask the question?

50Twuncle

Archi_Bald wrote: »

If you are serious with wanting to compare 1987 and 2015, please look at all the factors and not just those that - falsely - suggest it was as hard, or harder, to be a first time buyer in 1987 as it is now. I bought my first house in 1988, btw.

If "a normal person" wants to get 4%, or 5% or 6% for their savings today, they can easily get that, and they won't be limited to a paltry £200 a month like HTB ISA savers are.

Where can a "normal person" easily get 6% on their savings nowadays - without investing in some risky start up business in the far east ?

50Twuncle

YorkshireBoy wrote: »

You've benefitted from a massive increase in your property value(s) since then (probably quadrupled?), meaning that the same house is not possible for today's first timers...and even with the 25% (max £3K) boost!

NB, the interest rate is set by Halifax. Only the 25% is set by HM Government.

I bought my first house in 1982 for £16,800 and sold 12 years later in 1994 for £50,000. My max mortgage interest rate during that time was in the first year at 16% (non-endowment rate was a little cheaper at 15.5%, but I thought cheaper repayments were better!).

So I'm not sure where your "near 20%" figure comes from? Perhaps your memory is playing tricks?


And one other 'stunner' for you. Back in 1982 the path to a building society mortgage was to prove to them that the mortgage was affordable to you. You did this by saving each month in a society savings account. I distinctly remember saving the thick end of £200 a month (between us) for well over a year with the then Huddersfield & Bradford (now YBS) Building Society before being granted the £191 a month mortgage (£15K after £1,800 deposit @ 16% interest).

My first house (a two up two down) cost me £30,000 on an endowment mortgage- on which I was paying the thick end of £500 for several years at a rate of approx 18.5% !!
And when the endowment matured - I got back less than I had paid in (considering the interest rates over the years - this was WRONG - where was my money invested ?) - I did get compensation for a missold policy - but this only took it back up to what I had paid in over 22 years !!

jimjames

50Twuncle wrote: »

Where can a "normal person" easily get 6% on their savings nowadays - without investing in some risky start up business in the far east ?

As someone who's been on the forum for a few years, have you read the threads on this section? Have a browse and you'll find plenty of information available on all the rates. All are FSCS protected and no far east startups.

Tip though, mainly ignore cash ISAs as there are far better rates available outside

YorkshireBoy

50Twuncle wrote: »

Where can a "normal person" easily get 6% on their savings nowadays - without investing in some risky start up business in the far east ?

Regular savers with FD, HSBC, & M&S. In total they'll take £800 a month, 4 times the HTB ISA monthly limit.

YorkshireBoy

50Twuncle wrote: »

My first house (a two up two down) cost me £30,000 on an endowment mortgage- on which I was paying the thick end of £500 for several years at a rate of approx 18.5% !!

May I ask who the lender was? And was it a specialist mortgage provider? Reason being I've never 'met' anyone who paid more than 16% (the rate I was paying in 1982) since the early 80's. My rate didn't even get that high during the 1992 European ERM withdrawal when BOE rates were increased from 10% to 12% and then to 15%...the so-called Black Wednesday.

50Twuncle

YorkshireBoy wrote: »

May I ask who the lender was? And was it a specialist mortgage provider? Reason being I've never 'met' anyone who paid more than 16% (the rate I was paying in 1982) since the early 80's. My rate didn't even get that high during the 1992 European ERM withdrawal when BOE rates were increased from 10% to 12% and then to 15%...the so-called Black Wednesday.

My mortgage was with the Woolwich the endowment was with Royal & Sun Alliance who sold on to Phoenix who had no idea on investments