Japhy Rider Posted February 9, 2009 Share Posted February 9, 2009 can any of you on this board prove to me that you can run faster than the speed of light?you cant can you. morons. I'm really weirded out by this thread. I'd have thought that most of the posters here realize the power that savings give you over that of loan repayments. I would go as far as to say that I would happily suck up a o,5 to 1.0% deficit in my saving rate in order to maintain control over my cash. repayments you have made against a loan will never be in your control ever again. Quote Link to comment Share on other sites More sharing options...
Japhy Rider Posted February 9, 2009 Share Posted February 9, 2009 can any of you on this board prove to me that you can run faster than the speed of light?you cant can you. morons. Morons. why exactly? somebody fetch a calculator for this man. I reference you to post 41. It's a realy simple question. Quote Link to comment Share on other sites More sharing options...
mfp123 Posted February 9, 2009 Share Posted February 9, 2009 (edited) Morons. why exactly? somebody fetch a calculator for this man. I reference you to post 41. It's a realy simple question. i thought id just join in with threetimesdead by asking my own unanswerable hypothetical question. then call everyone a moron for not being able to answer me. Edited February 9, 2009 by mfp123 Quote Link to comment Share on other sites More sharing options...
ader Posted February 9, 2009 Share Posted February 9, 2009 I would go as far as to say that I would happily suck up a o,5 to 1.0% deficit in my saving rate in order to maintain control over my cash. repayments you have made against a loan will never be in your control ever again. Which is why I prefer to overpay significantly into an offset account - best of both worlds. You can't often easily get a savings vehicle as good. I only say often and easily as I didn't for example borrow from the Japanese at 0% and lend to the west at 5%. would've been nice... Quote Link to comment Share on other sites More sharing options...
Japhy Rider Posted February 9, 2009 Share Posted February 9, 2009 (edited) i thought id just join in with threetimesdead by asking my own unanswerable hypothetical question, then call everyone a moron for not being able to answer me. Sorry, sarcasm breakdown. reset in progress. edited for pissedness Edited February 9, 2009 by Japhy Rider Quote Link to comment Share on other sites More sharing options...
mfp123 Posted February 9, 2009 Share Posted February 9, 2009 Sorry, sarcasm breakdown. reset in progress.edited for pissedness you must have been really confused with the banana arguement then... Quote Link to comment Share on other sites More sharing options...
Japhy Rider Posted February 9, 2009 Share Posted February 9, 2009 Which is why I prefer to overpay significantly into an offset account - best of both worlds. You can't often easily get a savings vehicle as good. I only say often and easily as I didn't for example borrow from the Japanese at 0% and lend to the west at 5%. would've been nice... I would agree (and I do in a way), except that offset accounts are necessarily with the same institution as your mortgage lender. Try telling them that you can't afford your mortgage payment one month. See what they say. JR Quote Link to comment Share on other sites More sharing options...
ader Posted February 9, 2009 Share Posted February 9, 2009 I think the OP was really just trying to raise an interesting recent phenomenon whereby the interest rate on some tracker mortgages is actually less than the rate paid on some relatively safe investments.here's a purely academic question: You have a loan which is completely flexible and on which you pay an annual interest rate of 5% In the market there is a savings vehicle which pays an annual interest rate of 6% Which is the better choice? A. Repay capital on the loan B. Repay only interest and put any capital repayments you would have made into the savings scheme Depends on you're definition of "better". For 1% difference, "better" for me would be what's easiest as 1% isn't worth the hassle. In reality, if someone can point out where a safe arbitrage opportunity on mortgages and savings accounts exists for your average joe, a few of us would be interested as that would be the banks giving us free money. I'd like to see it... Quote Link to comment Share on other sites More sharing options...
jonpo Posted February 9, 2009 Share Posted February 9, 2009 a bank lends at say Libor +100 and borrows(e.g offers ISAs) at Libor - 100 say... there is. no arbitrage... Quote Link to comment Share on other sites More sharing options...
Japhy Rider Posted February 9, 2009 Share Posted February 9, 2009 you must have been really confused with the banana arguement then... I must confess that I didn't read it. It all seems so simple to me... and I don't really like bananas. Now pineapples we could talk about. JR Quote Link to comment Share on other sites More sharing options...
mfp123 Posted February 9, 2009 Share Posted February 9, 2009 (edited) Depends on you're definition of "better". For 1% difference, "better" for me would be what's easiest as 1% isn't worth the hassle. In reality, if someone can point out where a safe arbitrage opportunity on mortgages and savings accounts exists for your average joe, a few of us would be interested as that would be the banks giving us free money. I'd like to see it... but on the flip side you also need to appreciate the opportunity cost of capital. in theory having easy access to your money should be at a cost you( and in reality this is generally the case) . so having an option to get easy access to your money AND getting a better rate, is considered the better option. bear in mind the only way you can access the money saved in your house at any point, is to sell the house. Edited February 9, 2009 by mfp123 Quote Link to comment Share on other sites More sharing options...
ader Posted February 9, 2009 Share Posted February 9, 2009 I would agree (and I do in a way), except that offset accounts are necessarily with the same institution as your mortgage lender. Try telling them that you can't afford your mortgage payment one month. See what they say.JR They'd say yes, as it's one of the products features ( because I have also made a few months payments "in advance" as they call the results of my rounding up the repayments for a few years on the trot). When that's run out I could use the offset savings to pay the mortgage if tshtf. Quote Link to comment Share on other sites More sharing options...
geoffk Posted February 9, 2009 Share Posted February 9, 2009 this thread has messed my head.....this is the strangest one yet... Quote Link to comment Share on other sites More sharing options...
Japhy Rider Posted February 9, 2009 Share Posted February 9, 2009 Depends on you're definition of "better". For 1% difference, "better" for me would be what's easiest as 1% isn't worth the hassle. In reality, if someone can point out where a safe arbitrage opportunity on mortgages and savings accounts exists for your average joe, a few of us would be interested as that would be the banks giving us free money. I'd like to see it... I'm not sure there is much arbitrage oportunity here. There are a few people whose mortgage rates are tracking the MPC rates. for them there is a theoretical benefit, but if your real rate is low then I would say keep the money if you can. do the sums for a 0.5% or 1.0% difference in your repayments (if you have the option). cash is king! but don't ever default! Quote Link to comment Share on other sites More sharing options...
Japhy Rider Posted February 9, 2009 Share Posted February 9, 2009 They'd say yes, as it's one of the products features ( because I have also made a few months payments "in advance" as they call the results of my rounding up the repayments for a few years on the trot). When that's run out I could use the offset savings to pay the mortgage if tshtf. I agree (sort of) anything that keeps some control over your money is good. Quote Link to comment Share on other sites More sharing options...
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