If renting is dead money what's this

bonnie_2

My friend got a 10 year fixed rate from the woolwich today i think it was 4.49%.
£74000
total payable £137000
So your almost paying for the house twice it says that for every pound you pay they take an extra 83p.
considering shes had a mortgage for 22 years and still has another 25 to go how much interest is it long term.

maninthestreet

I can't believe you've been a member of these forums for 3 years and have only just realised how mortgage interest works.

bonnie_2

Its the first time i have seen it laid out in idiots terms, the woolwich obviously does thing properly.

Tiddler_2

bonnie wrote: »

Its the first time i have seen it laid out in idiots terms, the woolwich obviously does thing properly.

You've not seen a mortgage quote or KFI as they are now called, in the last 3 and a half years then!!

All KFIs are standardised to be in the same format, showing the same information

Markyt

bonnie wrote: »

My friend got a 10 year fixed rate from the woolwich today i think it was 4.49%.
£74000
total payable £137000

I think you'll find that is payment for a house, which will belong to the person at the end of it.

quidsin

bonnie wrote: »

My friend got a 10 year fixed rate from the woolwich today i think it was 4.49%.
£74000
total payable £137000
So your almost paying for the house twice it says that for every pound you pay they take an extra 83p.
considering shes had a mortgage for 22 years and still has another 25 to go how much interest is it long term.

I started my mortgage 6 years ago and was fully aware of how much i'd end up paying in the end, same as other loans.

But when the house was built 30 odd years ago, the owners bought it for around 20 grand & might of had a mortgage of 15-20 grand, and would probably end up paying 30-40 grand back, if they stayed in the house they would it would be worth 8 times what they paid for it.

maninthestreet

Even 11 years ago, my mortgage offer showed the total amount payable over the 25 years life of the mortgage.

neas

Interest costs more than renting but after 25 years you would own the house... but not own the rented property.

With a mortgage it would be wise to pay it faster and the 'total paid' would be reduced as you wouldn't pay as much compound interest.

minimike2

The total to pay section on KFI means nothing. It assumes that you never change your mortgage ever again and that the follow on rate, which is always either SVR or a tracker, never changes.

Therefore rendering the information useless.

You would be a fool to have a 22 year mortgage and to never remortgage after your initial deal (unless its a lifetime product, but then the total to pay will show much lower anyway).



I doubt the rate was 4.49. IIRC Woolwich 10 Year Fixed is currently 5.59 below 60% LTV

nathanhill69

bonnie wrote: »

My friend got a 10 year fixed rate from the woolwich today i think it was 4.49%......

Really??????

neas

in a declining market renting is definatelty not dead money, for every 1k drop you save double that.. over the term.

So a drop of 10k is really a drop of 20k over the life of the mortgage .