HSBC 0.99% fixed rate mortgage

cells

chucknorris wrote: »

Welcome to the 'where else can I invest club'

I think your plans are sound for your retirement (ie sell and spend rather than hold forever) I dont think many people really think that way. There must also be a point whereby the time it takes to monitor and make investments is not worthwhile and a simple bank account is the best option but we are talking about the last possible handful of years.

chucknorris

cells wrote: »

I think your plans are sound for your retirement (ie sell and spend rather than hold forever) I dont think many people really think that way. There must also be a point whereby the time it takes to monitor and make investments is not worthwhile and a simple bank account is the best option but we are talking about the last possible handful of years.

My current plan is to sell up when the base rate rises to around 2%, or in 10 years (if they stay low that long) whichever comes first. Brexit however may force me to reconsider my options, if prices fell, I think I would probably consider holding onto them for a bit longer, if that proved necessary.

Thrugelmir

AG47 wrote: »

It's now embarrassing how desperate the attempts to exasperate the bubble.

Why would anybody not see that property is a huge bubble waiting for a pin.

With money to lend , lenders go fishing. Though the cheap money is only for 2 year rates.

mwpt

Thrugelmir wrote: »

With money to lend , lenders go fishing. Though the cheap money is only for 2 year rates.

Yes and you need to count the fees into the cost. These two year fixes make fantastic sense at higher property values where the fees are a small fraction of the overall cost, but far less sense on cheaper properties. For me, I just moved to a new product after my initial two year fix ended. I paid a £900 transfer fee and it did make sense as opposed to a higher interest rate lower fee deal.

I also have the consideration that I want to remain fairly nimble to trade up if possible, so going for longer fixes tying me in isn't what I want.

mwpt

cells wrote: »

your thinking just of borrow to buy, there are also lots and lots of savings to buy. London homes might look expensive at say 4% yield but its a whole lot higher than the 0.4% a bank is offering.

Yes, that is indeed what I'm doing. You're correct that there is a lot of money floating around London but my statement is also correct that monthly payments just keep getting cheaper as mortgages rates fall.

Sometimes I think to myself take some of the chips off the table (ie sell a few) but then I think what am I going to put the money into and the alternatives dont seem attractive.

FTSE and global tracker funds offer long term dividend returns and capital growth. But of course you can't leverage up to buy these while writing the interest costs off against the income received.

chucknorris

cells wrote: »

your thinking just of borrow to buy, there are also lots and lots of savings to buy. London homes might look expensive at say 4% yield but its a whole lot higher than the 0.4% a bank is offering.

Dividend income isn't far behind 4%, and it is more favourably taxed than rental income, and it is far easier to avoid CGT, and it is taxed less anyway at only 20% (for HRT payers), so there isn't much in it. I'm not selling, but I am currently investing in shares, and have been for the last 8 years.

michaels

mwpt wrote: »

Overall supply on the market in most areas in London remains low. In those areas, there are many willing buyers. As long as interest rates keep falling, the amount these buyers can bid for the properties can keep rising, so I expect that if the downward interest rate trend continues, the upward trend in house prices will continue. Of course this also depends on how brexit proceeds.

Surely given the current rules the headline rate has no impacyt on affordability which will continue to be assessed against a 7%+ reference rate?

padington

vivatifosi wrote: »

FT has a good article on this. Only fixed for two years and has a big fee, so true cost will be higher. May be good for some though:

https://next.ft.com/content/fe3ee3d2-3706-11e6-a780-b48ed7b6126f

They don't give you those mortgage rates at HSBC unless you have 50 - 100k sitting in their current account paying crap interest rates. HSBC calls this stupid behaviour being a 'premium customer'.

It only becomes profitable if you own a palace so they then can bully you for the rest of your money. I would stay well clear of HSBC. Their share advice is terrible and quite aggressive.

Their marketing technique is to appear the most competive whilst actually not being.

Don't believe the hype.

cells

mwpt wrote: »

FTSE and global tracker funds offer long term dividend returns and capital growth. But of course you can't leverage up to buy these while writing the interest costs off against the income received.

I've considered UK reits which not only can deduct interest as a business cost and will soon be paying 15% (or less) corporation tax as opposed to my 45% but you can get the dividends and capital gains tax free inside a pension or ISA. Oh and not forgetting the original stamp duty is 1/10th or less than the equivlabt of buying a house to let directly and they do employ leverage

Say what you want about BTL but don't pretend its a tax efficient investment compared to shares or gilts

cells

chucknorris wrote: »

Dividend income isn't far behind 4%, and it is more favourably taxed than rental income, and it is far easier to avoid CGT, and it is taxed less anyway at only 20% (for HRT payers), so there isn't much in it. I'm not selling, but I am currently investing in shares, and have been for the last 8 years.

You are probably right and I'm probably not using good jugment when I think this but I simply don't like that the directors of a corporate can effectively bankrupt a company with one signature or award themselves £600 million bonuses for doing nowt like the recent story of the directors of one of the building companies.