Lifetime fixed rates for FTBers

The-Joker

Under the plan, buyers would only need a 5% deposit to secure the keys to their first property.

Their mortgage payments would remain the same until it was paid off, meaning they would not be hit by spikes in interest rates.

The-Joker

So in decades time some people who took out mortgages this year will be paying a couple of days work per week as their monthly mortgage payments???????

Or are the government thinking there will be no inflation over the next few decades?

The-Joker

Both labour and tories are attacking the property markets and trying to buy votes

The party is also offering voters a 'First Home' scheme, which will sell properties at a 30% discount to first time buyers seeking a property in their local area.

Meanwhile, private tenants will be entitled to 'Lifetime Rental Deposits', which the Conservatives said could be transferred from one property to simplify the process and cut fees.

The pitch to renters came as Labour unveiled its own plans for a major expansion of council house building in a bid to tackle the UK's housing crisis.

Boris Johnson said the Tories had "always been the party of homeownership" but vowed that a majority Conservative government "can and will do even more to ensure everyone can get on and realise their dream of owning their home".

Thrugelmir

The-Joker wrote: »

Meanwhile, private tenants will be entitled to 'Lifetime Rental Deposits', which the Conservatives said could be transferred from one property to simplify the process and cut fees.

Did you skim read the proposals?

The-Joker

Thrugelmir wrote: »

Did you skim read the proposals?

What do you mean?

Why have you highlighted the world entitled?

zagubov

The-Joker wrote: »

Under the plan, buyers would only need a 5% deposit to secure the keys to their first property.

Their mortgage payments would remain the same until it was paid off, meaning they would not be hit by spikes in interest rates.

That kind of mortgage used to exist. My parents had a 25 year fixed rate.

Not very common though and they became rare as hens teeth as years went by. I think the US still has long fixes like that.

The-Joker

If there is big inflation in the future then those who got life time fixed rates will be laughing

Malthusian

The-Joker wrote: »

If there is big inflation in the future then those who got life time fixed rates will be laughing

Everyone with a mortgage will be laughing as big inflation will make it easier to pay their mortgages. Everyone in debt will be laughing for that matter. But those with mortgages will be rolling in the aisles because the asset they bought with the debt will (hopefully) rise in line with inflation while the debt stays the same.

If your interest rate rockets to the extent you can't pay it (despite your higher earnings), it matters little because you can just sell your house, pay off the mortgage (which thanks to big inflation will be a fraction of the proceeds) and buy another with what's left.

If inflation doesn't skyrocket however, fixing for 25 years is likely to cost you a very large sum of money. All for the sake of protection that very few people need.

Politicians do have a habit of proposing to launch financial products that don't currently exist because nobody wants them. (Thinking it sounds like a good idea is not the same thing. Everyone would like a mortgage that is fixed for 25 years at the same rate they are paying now on their 2-year deal, but show them what it would actually take out of their bank account in reality, and they immediately lose interest.)

The-Joker

Malthusian wrote: »

Everyone with a mortgage will be laughing as big inflation will make it easier to pay their mortgages. Everyone in debt will be laughing for that matter. But those with mortgages will be rolling in the aisles because the asset they bought with the debt will (hopefully) rise in line with inflation while the debt stays the same.

If your interest rate rockets to the extent you can't pay it (despite your higher earnings), it matters little because you can just sell your house, pay off the mortgage (which thanks to big inflation will be a fraction of the proceeds) and buy another with what's left.

If inflation doesn't skyrocket however, fixing for 25 years is likely to cost you a very large sum of money. All for the sake of protection that very few people need.

Politicians do have a habit of proposing to launch financial products that don't currently exist because nobody wants them. (Thinking it sounds like a good idea is not the same thing. Everyone would like a mortgage that is fixed for 25 years at the same rate they are paying now on their 2-year deal, but show them what it would actually take out of their bank account in reality, and they immediately lose interest.)

Mortgage is a different kind of beast, the bank (casino) always wins

They can revalue the debt after all they own the house until it’s paid off then the queen owns it

DannyGold

Lifetime fixed rates and 30% discount on new homes will be the reason why Torries win next week

They have to deliver on these promises or the civil unrest that will happen in the uk will make 2011 riots seem like child’s play

westernpromise

We don't do civil unrest in the UK. We leave that to the likes of the French and the Greeks.