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apom

Debt And Interest Rates

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Okay.

Imagine you have a £150,000 mortgage.

Currently the interest against this would be.

£6,750 a year at 4.5% or £562 a month

£7,500 a year at 5% or £625 a month

£9,000 a year at 6% or £700 a month

and this is no capital payments at all.

None.

the above figures are merely an interest only loan.

Depending on loan types the above interest rates might all be valid.

and shouldn't you be paying back capital..?

Now in the last four years council tax has increased by on average £45 a month.

Fuel is up now to record highs..

Power and water and gas bills are set to surge.

the Gulf of Mexico has lost 20 oil platforms in the hurricane

We have people in a lot of debt with living costs rocketing and a finite pot of money that everything seems to want a bigger share of.

Look at the above costs

Imagine you are a BTL Landord.

Their interest rates are higher then normal.

add £100 a month service costs and compare to possible rent incomes.

£150,000 in Exeter is a two bed flat not a house.

are they really making money..? or are they loosing it.

and are they looking at 3.7% price drop this year

Edited by apom

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The figures should indicate why you can't actually buy at the moment.

high levels of unsustainable debt is not the sort of thing I look to carry around like a monkey on my back.

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The figures should indicate why you can't actually buy at the moment.

high levels of unsustainable debt is not the sort of thing I look to carry around like a monkey on my back.

Me neither. I've attacked my mortgage quite agreesively with overpayments and was debt-averse even when I took it out. Recently, however, I have become even more debt-averse and just want rid of it altogether.

Funnily enough, when I took it out (nearly 6 years ago) I never thought I'd be able to pay it off in the 'foreseeable future', even though I deliberately took out a flexible deal and overpaid from the start. It's only recently that I can actually see the light at the end of the tunnel though and with a lot of effort could obliterate it pretty soon.

I'm glad I was fortunate with my timing and managed to buy before the world when completely crazy.

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Thought about repaying extra amounts as and when can afford to, off mortgage, (even at a low fixed rate can pay off up to 10% pa). But IMO better to put in mini cash isa, (rate higher than mortgage rate), and still have that money to draw against if and when needed. Do it yourself offset ;)

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Thought about repaying extra amounts as and when can afford to, off mortgage, (even at a low fixed rate can pay off up to 10% pa). But IMO better to put in mini cash isa, (rate higher than mortgage rate), and still have that money to draw against if and when needed. Do it yourself offset ;)

Providing you dont need the cash , overpaying is about the best return you can get on your money.

As far as I'm aware.

I was recently overpaying ( until i str'd ) and had reduced my term from 15 yrs to 4yrs , this would have saved me about £12k-£14k in interest .

Couldnt beat that anywhere else for £400 / mth.

D.

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Any opinions appreciated, would you not agree that if you had as much or more in savings than mortgage outstanding, you are in effect mortgage free. Would not cash in the bank be more beneficial whilst in employment, rather than repaying mortgage in full and having no savings at all. Say if lost/left job you would not have access to a mortgage, but would still have savings to live on. Could always extend term of o/s mortgage or convert to interest only as a last resort (not recomended).

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Guest muttley

I never met anyone who regretted paying their mortgage off early.It sounds boring,and mortgages are incredibly cheap at the moment,but why give the bank anything?

Offset mortgages? I dunno,but there must be something in it for the banks.They seem to be pushing them at the moment.

How to annoy your bank.

1) Pay off your mortgage

2) Always pay your credit card on time.

3) Never go overdrawn.

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Any opinions appreciated, would you not agree that if you had as much or more in savings than mortgage outstanding, you are in effect mortgage free. Would not cash in the bank be more beneficial whilst in employment, rather than repaying mortgage in full and having no savings at all. Say if lost/left job you would not have access to a mortgage, but would still have savings to live on. Could always extend term of o/s mortgage or convert to interest only as a last resort (not recomended).

You can do both, with offsetting. If you have an outstanding mortgage of 50k, but 50k in savings, you pay no interest on the mortgage but have instant access to your savings if you need them, say in the case of redundancy. (Obviously if you eat into your savings you start to pay interest on the mortgage).

Muttley, banks usually charge a higher interest rate for offset mortgages, but for the financially disciplined it's likely to be the best way to save money.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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