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My Debt Experiment

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As some are probably aware we bought our house a few weeks back taking out a mortgage for 75% of the house value.

Thought I'd try a trick on my wife on my last visit to Tescopoly (it will be now i've see how organised Aldi are now) and picked up a leaflet for a 7.4% loan.

Mrs Posh comes home from work and the fun begins...

MPosh : what's that leaflet on the table

TPosh : oh that, I'm thinking of taking out a loan for £12k

MPosh : why do you want to do that

TPosh : no real reason, the iPad2 is out shortly and...

MPosh : I DON'T WANT US TO GET INTO DEBT WE DON'T NEED A LOAN

TPosh : funny that you didn't complain when we took on £120k of debt last week.

Basically, women and nonHPCers still don't see a mortgage as a debt. We can change this attitude one by one. That was last night and she has stopped speaking to me so there are other advantages :D

Edited by tomposh101

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As some are probably aware we bought our house a few weeks back taking out a mortgage for 75% of the house value.

Thought I'd try a trick on my wife on my last visit to Tescopoly (it will be now i've see how organised Aldi are now) and picked up a leaflet for a 7.4% loan.

Mrs Posh comes home from work and the fun begins...

MPosh : what's that leaflet on the table

TPosh : oh that, I'm thinking of taking out a loan for £12k

MPosh : why do you want to do that

TPosh : no real reason, the iPad2 is out shortly and...

MPosh : I DON'T WANT US TO GET INTO DEBT WE DON'T NEED A LOAN

TPosh : funny that you didn't complain when we took on £120k of debt last week.

Basically, women and nonHPCers still don't see a mortgage as a debt. We can change this attitude one by one. That was last night and she has stopped speaking to me so there are other advantages :D

:lol::lol::lol:

Brilliant. Admire your dedication in that you actually went through with a house purchase in order to ram your point home. You are a true martyr to the HPC cause!

Edited by General Congreve

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As some are probably aware we bought our house a few weeks back taking out a mortgage for 75% of the house value.

Thought I'd try a trick on my wife on my last visit to Tescopoly (it will be now i've see how organised Aldi are now) and picked up a leaflet for a 7.4% loan.

Mrs Posh comes home from work and the fun begins...

MPosh : what's that leaflet on the table

TPosh : oh that, I'm thinking of taking out a loan for £12k

MPosh : why do you want to do that

TPosh : no real reason, the iPad2 is out shortly and...

MPosh : I DON'T WANT US TO GET INTO DEBT WE DON'T NEED A LOAN

TPosh : funny that you didn't complain when we took on £120k of debt last week.

Basically, women and nonHPCers still don't see a mortgage as a debt. We can change this attitude one by one. That was last night and she has stopped speaking to me so there are other advantages :D

I read an article once on debt, the jist of it was..."the only good debt is moprtgage debt".....that might well have been true when house prices were going up 10-20% per year, but now it's the worse kind of debt because it can ruin/cripple you.

There is NO GOOD DEBT.

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Playing devils advocate though, mortgage debt is 'better' as in theory you are swapping the £120k mortgage debt for an asset worth £120k.

On top of that, you're getting a yield from that asset in terms of having a roof over your head and not paying rent.

The same can't be said of spending a £10k loan on nothing in particular....

Flaw in the plan is that the house obviously implies much larger figures, longer terms, and uncertainty about value of the asset, but they are still a different kettle of fish.

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"Basically, women and nonHPCers still don't see a mortgage as a debt. We can change this attitude one by one. That was last night and she has stopped speaking to me so there are other advantages"

No your wife does not see mortgage as a debt. Not all women. Good luck with the marriage with that attitude, it'll be less funny when she takes half the house :lol:

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"Basically, women and nonHPCers still don't see a mortgage as a debt. We can change this attitude one by one. That was last night and she has stopped speaking to me so there are other advantages"

No your wife does not see mortgage as a debt. Not all women. Good luck with the marriage with that attitude, it'll be less funny when she takes half the house :lol:

What I mean is proportionately more women than men (including my wife). She'll have to fight me through the courts to get hold of my 1% equity :lol: - I can't see us splitting-up, a spade is a spade in our household and it was all in gest anyway.

We will no longer be beholden to our former landlords or their financial woes and whims. Blowing hot and cold over selling or not and having clauses in the tenants contract that makes Saturdays open days, costly moves, vetting etc etc it does have it's advantages.

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What I mean is proportionately more women than men (including my wife).

I don't know who is the greater fool, your wife for not recognising absolute debt or you for not distinguishing between asset-backed debt versus consumer credit and for drawing any conclusion from a statistical sample size of two

Edited by Maursh

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We will no longer be beholden to our former landlords or their financial woes and whims. Blowing hot and cold over selling or not and having clauses in the tenants contract that makes Saturdays open days, costly moves, vetting etc etc it does have it's advantages.

Also buying your own home is extremely tax efficient as you don't pay tax on the imputed rent and there is no capital gains tax on your primary residence. There is no real way for a renter to enjoy these advantages using other types of investment.

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Playing devils advocate though, mortgage debt is 'better' as in theory you are swapping the £120k mortgage debt for an asset worth £120k.

On top of that, you're getting a yield from that asset in terms of having a roof over your head and not paying rent.

Buying a house at a cyclical peak... now that's bad

Buying in cash is good. If you have it, and it will buy you what you need. But generally it won't, so buying with mortgage debt is OK in my opinion. Perhaps not right now, but usually over time, the asset will increase in value. Exceptionally, when you come to sell it you pay no capital gains tax. Mortgage interest rates tend to be lower than rates for other borrowing, and may even be below inflation at times. Debt is a zoo, but affordable mortgage debt, on a single residence in which you intend to live, seems like a different animal to me.

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What I mean is proportionately more women than men (including my wife). She'll have to fight me through the courts to get hold of my 1% equity :lol: - I can't see us splitting-up, a spade is a spade in our household and it was all in gest anyway.

We will no longer be beholden to our former landlords or their financial woes and whims. Blowing hot and cold over selling or not and having clauses in the tenants contract that makes Saturdays open days, costly moves, vetting etc etc it does have it's advantages.

sigh...

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Buying a house at a cyclical peak... now that's bad

Buying in cash is good. If you have it, and it will buy you what you need. But generally it won't, so buying with mortgage debt is OK in my opinion. Perhaps not right now, but usually over time, the asset will increase in value. Exceptionally, when you come to sell it you pay no capital gains tax. Mortgage interest rates tend to be lower than rates for other borrowing, and may even be below inflation at times. Debt is a zoo, but affordable mortgage debt, on a single residence in which you intend to live, seems like a different animal to me.

But you have to consider that fact that while it may a nice lowish rate its a long repayment term so you are still looking at paying back twice what you borrow. Meaning that if I buy a house for £200k with 10% deposit that house will actually cost me £380k+ fees by the time it is repaid.

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But you have to consider that fact that while it may a nice lowish rate its a long repayment term so you are still looking at paying back twice what you borrow. Meaning that if I buy a house for £200k with 10% deposit that house will actually cost me £380k+ fees by the time it is repaid.

Pent Up, I accept that, but there is a sporting chance that your £200k house will be worth at least £380k+ by that time

It would be great if you could either buy in cash or repay really quickly to avoid interest payments, some people have that luxury but for the rest of us a mortgage not a dreadful choice in the same way that taking a loan to buy an Ipad2 would be!

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  • 309 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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