We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
MSE News: Is the interest-only mortgage dead?
Former_MSE_Helen
Posts: 2,382 Forumite
This is the discussion thread for the following MSE News Story:
"Interest-only mortgages are so hard to come by, leading broker David Hollingworth to question if the market's dead"
"Interest-only mortgages are so hard to come by, leading broker David Hollingworth to question if the market's dead"
0
Comments
-
What's the point of borrowing money if I have to start giving it back straight away? You've lent me the money, let me use it, until the time is up. In this particular case, 25 years :cool:.0
-
Mainly because people are too stupid to realise they have to pay it back. You only have to look at a thread on here where someone is absolving themselves of any blame and apportioning it all to the "unethical" lender.
I don't like the changes, they are being done for all the wrong reasons and will harm the UK mortgage market but if it stops these jumped up little twerps who take zero responsibility for their life choices from making the mistake in the first place then I will suffer it.
Alternatively they should make every mortgage an advised sale so that everyone has to speak to a financial adviser to arrange a mortgage. That way you only need to enforce the importance of explaining IO to everyone via the FA channel. That won't happen because the banks want to continue their non-advised sales route so they can continue to (mis)sell insurance to the masses.The J is a Financial Advisor-This site doesn't check anyone's status and as such any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Always seek professional advice.0 -
-
I've been over in the Land of Opportunity (Australia) where, in the mining sector, no one seems to know there's been a GFC. I recently contacted my bank in the UK to discuss rates (to my interest only mortgage). Seems they're not prepared to lend me money on the terms that they've already lent to me! Compared to Oz, UK property (or at least London) is so postively geared, its a no-brainer. And yet despite me having demonstrated that for 5 years, they now think its all too risky.
Its just like the sheople playing the stock market... The fluctuations are the fear/greed mongers constantly overreacting.0 -
-
Lending to Australian residents is fraught with legal technicalities anyway, that's probably part of the problem. You probably don't know the secret Pom password either that we use to weed out those who have gone native.The J is a Financial Advisor-This site doesn't check anyone's status and as such any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Always seek professional advice.0
-
Int only is a relevant a suitable product in many cases. Take for example a Woman aged 58 suddenly finding her 30 year marriage over.
She needs to buyout the existing property or find a new one.
Because of tough FSA rules on lending above 65, many such people are told they can only have a 7 year mortgage. Not an issue on int only as the payments are affordable, but on capital repayment she suddenly has nowhere to go and is forced to rent.
This is the blind nature of blanket rules. Remember over 99% of people do not get repossessed, so these rules are out of sync.
In the past, capable adults like out 58 yo would in all porbability managed perfectly well. For example carried on working past 65 in the past, perhaps met a new partner and then be in a position to pay down the int only capital, or gradualy made overpayments, perhaps been in line for an inheritance.
Now she will be forced to rent - and many other categories of applicant also needing int only are now denied and forced to rent instead.
Great all round for landlords.0 -
Lets hope it spreads to buy to let mortgages, they should all be repayment.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
0 -
Lets hope it spreads to buy to let mortgages, they should all be repayment.
a) They are not regulated by the FSA.
b) They are investments and as such could be sold to repay the balance borrowed.
c) They garner tax relief on the interest element, why would you reduce that?
d) If they were on repayment, who would pay higher prices. Tenants, who have nowhere else to go, or Landlords? Hmmm.
Your reputation for unbridled and spectacular ignorance is growing fast brit :money:
edit: You still haven't updated your house price signature to the March figures as I have asked you to do a number of times. It can't be because it showed house prices increasing could it brit? Or do you just ignore bad news?The J is a Financial Advisor-This site doesn't check anyone's status and as such any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Always seek professional advice.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352K Banking & Borrowing
- 253.5K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245K Work, Benefits & Business
- 600.6K Mortgages, Homes & Bills
- 177.4K Life & Family
- 258.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards