Buying a house without a mortgage

Frugaldom

Hi Pavlov's & BoneIdle :hello:

Well done on reaching your 20k! :beer:

I daren't ask what you think of the latest interest rate cut, it's ridiculous! I was hoping that my ISA interest payments would have hit £50 per month and, instead, they have dropped to £20! :eek: I'm loathe to lock any more money away, not that I have much, but it would have been nice to know there was some interest to be had. As it is, €gg Money card is paying a higher interest on my credit balance than is being paid on my ISA! Who'd ever have thought that possible? I know it won't last much longer but I've no intentions of tying money in anywhere for a fixed term and I'll be giving up on stoozing as soon as I clear existing cards, that's for sure. If I can fill my 2009/10 ISA by the end of 2009 after paying towards DD's wedding, then I think I'll be happy at that. Oh, and I won another £50 from my Premium Bonds, so it was worth reinvesting after all the debates about will I, won't I? :j :T It's being diverted straight into my Interest Beater account

pavlovs_dog

nykmedia wrote: »

Hi Pavlov's & BoneIdle :hello:

Well done on reaching your 20k! :beer:

I daren't ask what you think of the latest interest rate cut, it's ridiculous! I was hoping that my ISA interest payments would have hit £50 per month and, instead, they have dropped to £20! :eek: I'm loathe to lock any more money away, not that I have much, but it would have been nice to know there was some interest to be had.

we're between a rock and a hard place on this one. Locking money away seems to be the only way of getting a halfway decent return on savings, but as we hope to be in a position to buy at the end of the year i'm reluctant to lock money away in case it hinders progress. But if i don't fix then i have to accept that i'm earning sod all interest compared to a few months ago.

nykmedia wrote: »

Oh, and I won another £50 from my Premium Bonds, so it was worth reinvesting after all the debates about will I, won't I? :j :T It's being diverted straight into my Interest Beater account

my lips are sealed

Bone_Idle

pavlovs_dog wrote: »

we're between a rock and a hard place on this one. Locking money away seems to be the only way of getting a halfway decent return on savings, but as we hope to be in a position to buy at the end of the year i'm reluctant to lock money away in case it hinders progress. But if i don't fix then i have to accept that i'm earning sod all interest compared to a few months ago.

Ugh, yes, same problem here. But we want to keep open the option of moving this year so locking it away runs counter to that...

Can I confess to still having £100 in Premium Bonds, in case "it could be me"?

NPowerUser

Paid off my mortgage in 2006 and I would like to move again in 2 years time, when hopefully house prices are stable and buyers return.

I would like to save 20K by the end of next year and I have decided to forgo the poor interest I would get by the usual saving methods in favour of Premium Bonds.

I am buying blocks of £400 in Premium Bonds at a time, so by the end of next year I will have 50 x £400 blocks = £20,000

I have only started since January 2009 but already well ahead of my target.

Frugaldom

If I could afford to do what NPowerUser says he/she is doing (saving £10,000 per year) then I could have saved to buy a whole house in under 5 years. Sadly, I don't even EARN £10,000 a year, so every £50 win is a big plus, especially since I'd almost made it to £50 per month in ISA interest before the slumming kicked in - my €gg card is paying better interest than my high interest account now! :rotfl: :rotfl: :rotfl:

Frugaldom

ISA rate has now dropped to 1.6% but I don't want to risk tying any of the money up in overseas banks or longterm bonds. It isn't like it's mega-thousands of pounds I have, but what's everyone else doing? I have read and read and read the forums and I am still no wiser. Has anyone truly decided what to do, yet? I'm considering leaving the existing ISA funds in place for safety reasons, but is it worth paying into a 2009/10 ISA from day 1 or would it be better saving elsewhere and then depositing it all into the new ISA before the tax year ends?

On the premium bonds front, when I heard there was a shadow of a doubt hanging over ICICI's head, I transferred some stoozed funds to premium bonds and won the £50 within 2 months, but at £50 tax free from £3000 worth of Premium Bonds, it still equates to only 1.66% Unless, of course, I have another small win before I need the cash to pay off a card. No stoozing planned for this year, it just isn't worth it any more. I know I can still get 3+% from my HiSave account but it isn't worth risking someone else's money for that, I'd rather take my 4% interest plus 1% cashback from €gg whilst it's still available. I guess it's back to playing the 'round-up' game of scraping together extra pennies to make up the savings to nice round pounds.

Would it be completely wrong to blow the house fund on a little flat somewhere and then rent it out? Surely the rental income from the 'investment', even after tax, would amount to a lot more than the interest gained from having equivalent in the bank? And, if everything went pear-shaped, then at least I'd be living rent free whilst saving for the dreamhome?

NPowerUser

Topped up my Premium Bond holding this morning by purchasing 2 x £400 blocks from two post offices within 5 minutes of each other.

I liken each £400 block to being a "brick" and when I have 50 bricks saved I can move, yipee!

That brings my total Premium Bond savings to 14 bricks. I will be buying one more £400 block next Monday and I think that will be it for a month before I try and resume again. Being mortgage free and debt free does help. I have about 20K's worth of limit on my Credit Cards but thankfully I have nothing owing on them, I have them for emergencies like the washing machine blowing up.

During March, I tend to pay off next years council tax by using the potential savings from my weekly income. I just hate the bill and I try and get it out the way, I am already £200 in credit.

I am still well ahead of my Premium Bonds savings target, so I hope to be adding just a modest amount to the total sometime in late March.

Frugaldom

Well done on all of the above, NPowerUser but I need to ask a daft question: Why not just top up your premium bonds online at different times so you get different blocks? Beats having to travel to the post office. (Unless, of course, you live or work within walking distance of a post office, which I don't. )

Just been switching bits and pieces around to try to make the best of what's left of the interest rates but am still not convinced by filling the 2009/10 ISA from first day of new tax year. When we moved house to here we paid the council tax in one lump sum as the Council discount worked out a better deal than the interest rates. Assuming they continue offering the same discount, we'll do the same with the 2009/10 bill.

Hope everyone is keeping up with their savings regimes, good luck - things certainly aren't getting any better on the interest rate front. :rolleyes:

NPowerUser

Thanks for the advice nykmedia,

My job as a taxi driver at night generates quite a lot of cash during the month.
As my current account tends to hold enough money just to cover just the direct debits each month, about £140, so if I started to buy Premium Bonds online, I would still have to visit the bank to pay the cash in, which is further away than the 2 post offices.

As the Post Offices are 10 minutes walk away from my home, I don't mind the exercise. I have plenty of time to kill during the day so its just an excuse to help fill my day.

I know I stand the same chance of winning on the Premium Bonds with a block of say £2000 but in the past I have won more often with the smaller blocks of 400-500.

I accept I could get more ineterest (just) if I shopped around online but with 22 months of savings left before I want to move and the excitement of a little envelope stuffed with a prize cheque seems far more preferable to handing over a pass book every April and saying "is that all"?

I may win nothing but I doubt it.

pavlovs_dog

nykmedia wrote: »

ISA rate has now dropped to 1.6% but I don't want to risk tying any of the money up in overseas banks or longterm bonds. It isn't like it's mega-thousands of pounds I have, but what's everyone else doing? I have read and read and read the forums and I am still no wiser. Has anyone truly decided what to do, yet?

I'm still yet to reinvest my Icesave ISA funds :whistle: I *will* do it before the end of the tax year although with rates as they are it barely seems worth it :rolleyes:

nykmedia wrote: »

I'm considering leaving the existing ISA funds in place for safety reasons, but is it worth paying into a 2009/10 ISA from day 1 or would it be better saving elsewhere and then depositing it all into the new ISA before the tax year ends?

I'd say suck it and see what interest rates are like at the time. don't forget to take compounding interest in account with your calculations though.

nykmedia wrote: »

Would it be completely wrong to blow the house fund on a little flat somewhere and then rent it out? Surely the rental income from the 'investment', even after tax, would amount to a lot more than the interest gained from having equivalent in the bank? And, if everything went pear-shaped, then at least I'd be living rent free whilst saving for the dreamhome?

it's such a minefield isn't it? how fast are prices falling in sunny Scotland? whilst falls are steady here in Cardiff and the immediate area, the market is flooded with seemingly unsellable flats - and it no longer seems to be restricted to the overdeveolped yuppie variety of flat either. would you want to manage the rental or be happy to pay someone else to do it for you? what if you couldn't sell when you needed to or it falls in value and you loose money? personally I'm very wary of tying my money up for fear of it stopping us from being able to move freely and swiftly should an appropriate opportunity arise, but you have to do what's right for you.