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The Myth Of The 3x Salary Mortgage!

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http://www.thisismoney.co.uk/mortgages/mor...page_id=58&ct=5

Around 55% of homeowners are still relying on an endowment to pay off the capital on their home. But one in three admitted that their savings would not be enough to pay off their mortgage.

One in ten was hoping that the value of their property would rise and cover the value of their mortgage. But no matter how fast prices rise, if you borrow £100,000 you will still owe £100,000 if you haven't sold your house.

DUH!

Research from Abbey reveals that more than a quarter of mortgages are still interest-only - where monthly repayments cover only the interest paid to the lender and nothing goes towards repaying the capital.

And one in three of these homeowners is living on borrowed time - not knowing how they will pay off the capital sum when the mortgage ends.

About one in five of the homeowners who took out interest-only mortgages told Abbey they did so because they would not have been able to afford a house any other way.

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Well there's a surprise then.

I mean this has been known for years now.

All involved, lenders and borrowers, just cling to the belief that property always goes up, inflation will take it's toll and that n years hence downsizing to pay off the capital will be possible.

Might work, who knows.

Always seemed daft but is, to me, indicative of the current mindset of live now the future will take care of itself.

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i will never understand this mindset - is it really so desperately important to some to get onto the 'property ladder' that they're prepared to leave themselves open to a situation where they will end up owing the bank 1 house after having paid them 25 years of rent?

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i will never understand this mindset - is it really so desperately important to some to get onto the 'property ladder' that they're prepared to leave themselves open to a situation where they will end up owing the bank 1 house after having paid them 25 years of rent?

Many people were poorly advised in the 80s, and were pushed into endowment mortgages. With hindsight, they will realise their mistake, but these policies were presented as 'the norm' at the time.

I have much less sympathy for those who take on interest only mortgages now, as they must be fully aware of the risks attached.

I'm shocked that 25% of mortages are interest only - does anyone have an additional source for this? Seems incredibly high to me. Do they mean 25% of all mortgages, or new mortgages?

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Guest Guy_Montag

My Dad had an endowment mortgauge. When he took it out, the endowment had to cover the cost of the house, any "with profits" profits were just that, profits for him. If you try to do things on the cheap, don't be surprised if it comes back to bite you on your ****.

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  • 301 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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