Jump to content
House Price Crash Forum
Sign in to follow this  
nice tuna sandwich

I Am Now Being Paid To Own A House

Recommended Posts

Mortgage 2.69% 2 yr fix

Cash ISA 3.09% guaranteed for first year

Me too:

Mortgage: BR + 1.89%, currently 2.39%

NS&I Certs: RPI + 1%, currently 6.0%

A bit of subtle helicoptering?

Share this post


Link to post
Share on other sites

By helicoptering, do you mean rescuing us over-indebted homeowners? Maybe, I think.

I meant that it is perhaps a sign of government strategy to induce inflation by effectively giving money away. Over indebted I ain't, BTW. My savings are almost equal to my mortgage. :)

Edit: I wasn't planning to buy, but was effectively forced to when my LL died and her children wanted to sell the house, and I really didn't want to move again. These IRs have certainly sweetened the pill though!

Edited by snowflux

Share this post


Link to post
Share on other sites

I meant that it is perhaps a sign of government strategy to induce inflation by effectively giving money away. Over indebted I ain't, BTW. My savings are almost equal to my mortgage. :)

I'm don't undertstand how it will induce inflation. But am very grateful that for me, for the first time, it makes more sense to build savings than to pay down debt. How strange this feels.

Share this post


Link to post
Share on other sites

I'm don't undertstand how it will induce inflation. But am very grateful that for me, for the first time, it makes more sense to build savings than to pay down debt. How strange this feels.

Yes, it is unnatural. I was initially going to cash in my savings and take out just a small mortgage, before realising at the last moment that it would make far more sense to borrow as much as the bank would let me and keep some of my savings!

Share this post


Link to post
Share on other sites

Interesting thread. I'm sure it applies only to a tiny minority - most on trackers never had savings to begin with, and the opportunity to strike this kind of balance is probably gone.

It's still going Japanese!

Share this post


Link to post
Share on other sites

your a brave man.

i would use the cash.

loading up on debt right now is a mugs game.

No, I'm a complete coward financially. As far as I can see, I'm not taking any risk whatsoever. If BRs rise and/or IRs fall, I'll simply pay off most of my mortgage with my savings (HSBC tracker allows this for no fee). It really is money for nothing.

Edited by snowflux

Share this post


Link to post
Share on other sites

you are not allowing for a fall in asset prices.

No matter how much my house falls in value, it makes no difference to the amount of money I owe. Which is just a little more than my savings.

Share this post


Link to post
Share on other sites

your a brave man.

i would use the cash.

loading up on debt right now is a mugs game.

Extreme example:

The maximum issue of NS&I bonds is £15k. £30k for a couple. They are currently paying 6% as in the example of the poster above.

You can buy a house in South Wales for £50k.

If you and your partner had £50k, you could use £20k + a 60% mortgage to buy that house in wales &you could invest the other £30k in NS&I bonds.

In a year you could pay only £600 mortgage interest but earn £2000 return on NS&I investment tax free. You would be paid £1400 to own the house. That would cover your council tax, buildings and contents insurance & you would live rent free for a year.

Edit = a return of 7p on every pound of capital employed PLUS you'd get somewhere to live free.

This seems weird

Edited by nice tuna sandwich

Share this post


Link to post
Share on other sites

thats my point,

I'm perfectly aware that my house is likely to fall in value (that's why I didn't really want to buy yet), but that does not mean I'm loading up on net debt. My debt is almost covered by my savings.

For me, it would have entailed a great deal of hassle to have to move again (the house is fine, the neighbours nice, my son's school is just down the road, rentals are hard to come by in the area, etc.), which is why I decided to buy the house.

Share this post


Link to post
Share on other sites

thats my point,

house prices are correcting due to inflation, ie not in nominal terms

far better to also hold debt that is being wiped out at an equal inflationary rate

only a fool would pay down a mortgage in this circumstance

Share this post


Link to post
Share on other sites

house prices are correcting due to inflation, ie not in nominal terms

far better to also hold debt that is being wiped out at an equal inflationary rate

only a fool would pay down a mortgage in this circumstance

Skipton BS now doing BTL mortgages fixed 3yrs at 3.6%, 70% LTV

Aviva preference shares yielding 7%+

If I was brave/ had nothing to lose/ had no social conscience- I'd arbitrage! Unfortunately I am not very brave, and have quite a bit to lose.

Share this post


Link to post
Share on other sites

not where im looking.

seen a 2 bed flat drop 20% in 12 weeks

A drop in asking price is not the same as a drop in value!

Though I wouldn't dispute that its value may well also be falling.

Share this post


Link to post
Share on other sites

fair point

your life is yours.

ive been ere a long time and prices in my search areas are falling big time.

Hmm, I suspect you're still missing the OPs and my point, which is that buying a house enables you to borrow money at an IR lower than than you can save it at. This is not, in itself, a reason to buy a house (especially when values are falling), but it does provide an additional incentive to do so.

Edited by snowflux

Share this post


Link to post
Share on other sites

fair point.

thats enough for tonight but cmon profit %0.4.

i will finish with when i buy a house it will be with cash so all i will be losing is the interest on my money (********).good night all

I could almost have bought my house for cash, but decided not to throw away the chance of making about £1000 per year with no additional investment or risk. Dunno where you got 0.4 % from - the return is actually ∞ % when you consider that you are getting something for nothing (having already decided to buy the house)!

Share this post


Link to post
Share on other sites

not where im looking.

seen a 2 bed flat drop 20% in 12 weeks

OK falling due to inflation IN ADDITION to the nominal falls

nevertheless, inflation IS happening, and leverage strangely enough protects you from this in a negative interest rate environment

Share this post


Link to post
Share on other sites

fair point

your life is yours.

ive been ere a long time and prices in my search areas are falling big time.

where is this anyway?

Share this post


Link to post
Share on other sites

Doesnt this only work if you have masses of savings in the first place? Ie you're a cash buyer.

I have neary £100k if I bought a house it would cost me £200k so if I use a £50k deposit and mortgage at £150k the interest repayments on a 2.5% tracker are £3756 per year. My £50k savings in a high interest fixed account say 4% will only get me £2000 per year.

I think very few people are actually in a position to be able to this. Basically you need you need your mortgage amount in cash to make it pay.

Share this post


Link to post
Share on other sites
<br />Mortgage 2.69% 2 yr fix<br />Cash ISA 3.09% guaranteed for first year<br />
<br /><br /><br />

What a pointless thread. Who the hell pays their mortgage off in 2 years??? And that ISA rate is only guaranteed for one year. :rollseyes:

Share this post


Link to post
Share on other sites

There are tens of thousands of 'homeowners' who had their rates slashed to next to nothing in 2008/2009.

There are people on 3/4 yr Interest only Tracker Mortgages, who are only being charged the nominal sum allowed.

Mortgages tied to between 0.51% 1.1% below the base rates, which prior to the bailouts stood at 5.5%

So their monthly rent was reduced from £1500 pcm to zero, or literally one pence pcm......

A zero interest loan.

Joe Taxpayer is paying for their free lifestyles. In their £400,000.00 house's.

This country is Sh1t.

Edited by Milton

Share this post


Link to post
Share on other sites

One btl been on 2.39% for ages and another 3.59% fixed for five years. My tenants are overpaying bucket loads each month in capital for me.

Both flats central London.

Rental demand is manic it seems, friend just rented his flat out same day hit the Market, agent had loads people on his books who were interested

How that diversification in the stock market going ??

Share this post


Link to post
Share on other sites

One btl been on 2.39% for ages and another 3.59% fixed for five years. My tenants are overpaying bucket loads each month in capital for me.

Both flats central London.

Rental demand is manic it seems, friend just rented his flat out same day hit the Market, agent had loads people on his books who were interested

How that diversification in the stock market going ??

i think its fair to say there are pretty much zero long term stock market bulls on here other than Si maybe and porcia (although his seems to be more VC and tax arbitrage), there are plenty of gold bugs/nutters (and non residents (ie non sterling) though , perhaps youd be better discussing with them how well your investments are holding up

Edited by Tamara De Lempicka

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.