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I've Bought..........

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Why would I pull out I've the money in the ISA's to cover any perceivable eventuality? If I want to move I could become on of those evil buy to letters. Both are our names are on the mortgage but she will be paying it (yes I know that could cause complications, but there will be a deed of trust whereby 75% of the house is mine & once she's paid it off transfer the other 25% to her so we own 50% each (oh & she's putting in 20K deposit). The ISA's that is in her name, is a risk, as it has been for the last 20 years I've been with her but I have control over usernames & passwords for the online account. And yes the mortgage is a repayment which you can over pay by 10K a year, which she intends to do as much as possible, but depends what happens with interest rates.

How will she hurt me if I leave my savings in my name only? The ISA's arnt joint accounts.

Oh & there has been no real luck involved, quite the opposite (lost loads in stock market crash 2000), its just been down to saving hard on a average wage job, lots of overtime equivalent to 6 day week & sadly living with the GF parents for over 10 years (all whilst waiting for the madness to end oh & I'm 42.) However In that time I have travelled the world & not had a sober weekend so its not been a totally wasted decade really, just the stigma of living like Ronnie Corbett in Sorry being the only wounder in the whole set up.

I do still feel like a traitor really, like the regime has won, but what can you do?

Not had a sober weekend in 10 years?

Top man!

At least wehn you eventually go, you'll go with many happy memories.

:)

Edited by SHERWICK

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snip

I do still feel like a traitor really, like the regime has won, but what can you do?

You will be sorely missed.

N+P have a fee.

you have forgotten to include opportunity cost on the deposit @ 3%, which actually adds to the total cost of ownership...this is of course unavoidable.

So you are spending 3% and the GF is spending, along with you, another 3.99%, call it 4% so in interest alone assuming no payback its costing you almost double in actual £ notes than you think....in other words, your interest gained is now wiped out by interest lost, and you have added the mortgage debt and interest.

Not sure why, if it was such a good idea, you didnt buy outright...you would need hardly anything then to live on. Instead you go all obfuscated on it only costing you 1% etc etc.

Very strange.

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Not had a sober weekend in 10 years?

Top man!

At least wehn you eventually go, you'll go with many happy memories.

:)

or blackouts..

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Lets put it this way, when the FSCS rate was upped to £50K some years ago the increase was claimed to only affect 1% of all savers.

People with real money don't keep it in savings. It's in property and pensions, with non-pension investments in third place.

Besides, when was the FSCS rate for savings ever £50k?

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... in fact I love my kids so much I refuse to have them, hows that for unconditional love? (Another side to my mental-isms.)

Nicely put!

The paradox of selfishness. Having kids is the most selfish act in people lives. Yet what (most) people do for their kids once they're born is the most unselfish.

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You will be sorely missed.

N+P have a fee.

you have forgotten to include opportunity cost on the deposit @ 3%, which actually adds to the total cost of ownership...this is of course unavoidable.

So you are spending 3% and the GF is spending, along with you, another 3.99%, call it 4% so in interest alone assuming no payback its costing you almost double in actual £ notes than you think....in other words, your interest gained is now wiped out by interest lost, and you have added the mortgage debt and interest.

Not sure why, if it was such a good idea, you didnt buy outright...you would need hardly anything then to live on. Instead you go all obfuscated on it only costing you 1% etc etc.

Very strange.

Sorry yes there is a fee of £295 with £200 cashback so a massive £95 I do apologise, I'm not spending 3% I'm getting 3% on my ISA's which is compounded every year all tax free, also I believe that interest rates will be higher in 5 years (let alone 10) on my savings but she'll still be paying 3.99% on whatevers left of the mortgage (can overpay by £10k a year without penalty as well.)

If I thought house prices were fair value I would have paid cash for it, however I don't & don't see why I should take the hit on the whole house on the crash I believe is coming .another reason is the gf not only wants to pay half, but believes the market will go up, so wants in. Also having a mortgage it's not our responsibility to look after the deeds. I'm also hedging against whatever hair brained scheme the government might come up with to keep the party going (MIRAS, free money to clear debts, who knows with the nut jobs in charge but if its ever on the cards I/we want a slice of it.

Oh & the mortgage is costing me nothing, nada, zilch, she's paying it all, I'm just on the mortgage as I have to be (but realise I'm liable for half should it all go Peter tong)

You may think very strange, I think very logical.

Edited by membrane

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Sorry yes there is a fee of £295 with £200 cashback so a massive £95 I do apologise, I'm not spending 3% I'm getting 3% on my ISA's which is compounded every year all tax free, also I believe that interest rates will be higher in 5 years (let alone 10) on my savings but she'll still be paying 3.99% on whatevers left of the mortgage (can overpay by £10k a year without penalty as well.)

If I thought house prices were fair value I would have paid cash for it, however I don't & don't see why I should take the hit on the whole house on the crash I believe is coming .another reason is the gf not only wants to pay half, but believes the market will go up, so wants in. Also having a mortgage it's not our responsibility to look after the deeds. I'm also hedging against whatever hair brained scheme the government might come up with to keep the party going (MIRAS, free money to clear debts, who knows with the nut jobs in charge but if its ever on the cards I/we want a slice of it.

Oh & the mortgage is costing me nothing, nada, zilch, she's paying it all, I'm just on the mortgage as I have to be (but realise I'm liable for half should it all go Peter tong)

You may think very strange, I think very logical.

sorry yes, I could buy outright, but instead, im going to cash in half the value of the house from my ISAs...loss- 3% compounded interest.

this is called opportunity cost.

so, cash flow wise, you are down the 3% on your "deposit" ( I hate that word) and the 3.99% on your mortgage.

tis all.

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Good luck, membrane. :)

not that kids are on the horizon, who'd want to bring up kids in the world we're living in today, I don't think it's fair on them to have kids because I want them...................in fact I love my kids so much I refuse to have them, hows that for unconditional love? (Another side to my mental-isms.)

That's the rule I live by. And the world overpopulation issue of course.

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sorry yes, I could buy outright, but instead, im going to cash in half the value of the house from my ISAs...loss- 3% compounded interest.

this is called opportunity cost.

so, cash flow wise, you are down the 3% on your "deposit" ( I hate that word) and the 3.99% on your mortgage.

tis all.

My options are.

1) buy the whole house with my hard earned cash I'm down 250k on a depreciating asset, gf lives for for free, but has no house to call her own

2) I pay half of the house with other cash I have (not in ISA's) , so am £125k down on i believe a depreciating asset but gf pays other half on 10 year fix mortgage @ 3.99% on a house she believes will increase in value. Now I have another 125k currently earning ME 3% tax free which I believe will be higher than 4% a few years down the line mitigating "losses" on her paying 3.99 the previous years plus keeping the tax free status of said 125K. We hopefully both win

You choose!

Edited by membrane

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I've given in to the madness & bought.

You did the right thing; and it actually has nothing to do with buying a property. In your situation, it is all about reducing your exposure to cash saving, whether you were aware it or not.

I bought last year, too. Knowing that the purchasing power (as oppose to RPI) of cash is decreasing by 5% - 10% a year, it is frightening to hold loads of cash.

This may sound extreme, but I would suggest hold no more than 1 year worth of salary in cash and turn the rest to something else that have better resistance again inflation, e.g. properties, shares, gold and funds etc. In other words, do what rich people do. See how they protect their money and learn.

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You did the right thing; and it actually has nothing to do with buying a property. In your situation, it is all about reducing your exposure to cash saving, whether you were aware it or not.

I bought last year, too. Knowing that the purchasing power (as oppose to RPI) of cash is decreasing by 5% - 10% a year, it is frightening to hold loads of cash.

This may sound extreme, but I would suggest hold no more than 1 year worth of salary in cash and turn the rest to something else that have better resistance again inflation, e.g. properties, shares, gold and funds etc. In other words, do what rich people do. See how they protect their money and learn.

Reducing my cash exposure certainly was a factor in the decision, & the cyprus theft certainly spooked me, but I don't believe property is the future either, in fact I havn't a clue what will actually keep up with the manufactored infaltion right now, let alone make a profit.. Cash going down in value, property going down in value, i've a few grand in shares, which i'll keep in but have little confidence in that. Gold is just a sentiment investment in my mind (has very little real use.) I'm just trying to hedge against every possible position the morons in charge decide to take....Something is serously going to implode..I just dont what & this seems to be the best I can come up with with the cards i've got.

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Congratulations on your buy !

I think its a good idea, the only thing I don't understand is why you feel the need to pay an extra 1% (at least) in interest to the banks in order to fix for 10 years.

I'd have gone for the short term fix and encouraged her to pay off as much as she can in 2 / 5 years... If and when interest rates rise you can then become her lender and she will pay you 4 / 5/ 6 % whatever the rate then will be then, I do believe this would have turned out to be much cheaper for the both of you than fixing for 10 years now .. And it keeps some money off the banks so it can't be bad :)

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Congratulations on your buy !

I think its a good idea, the only thing I don't understand is why you feel the need to pay an extra 1% (at least) in interest to the banks in order to fix for 10 years.

I'd have gone for the short term fix and encouraged her to pay off as much as she can in 2 / 5 years... If and when interest rates rise you can then become her lender and she will pay you 4 / 5/ 6 % whatever the rate then will be then, I do believe this would have turned out to be much cheaper for the both of you than fixing for 10 years now .. And it keeps some money off the banks so it can't be bad :)

I see what you're saying, but I want to hedge against all possibilities, what if IR's are 9% in 7 years time, after a bond collapse or something, she couldn't afford the SVR mortgage she'd then be on, on a house that will be worth vastly less than when we bought (especially if IR's are that high.) She has every intention to overpay as it is (the mortgage is for 112k as she's putting in 20k in deposit)

Also I think it's a good idea to have some kind of a mortgage as it wouldn't surprise me if TPTB decide to throw some kind of helicopter money at "hard working families" with mortgages. especially with an election to contest. I bloody hope not, but something has to give in all this.

Peace of mind is a price worth paying in my eyes. No one has a crystal ball, who'd thought we'd be where we are now even just 5 years ago?

Edited by membrane

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I see what you're saying, but I want to hedge against all possibilities, what if IR's are 9% in 7 years time, after a bond collapse or something, she couldn't afford the SVR mortgage she'd then be on, on a house that will be worth vastly less than when we bought (especially if IR's are that high.) She has every intention to overpay as it is (the mortgage is for 112k as she's putting in 20k in deposit)

Also I think it's a good idea to have some kind of a mortgage as it wouldn't surprise me if TPTB decide to throw some kind of helicopter money at "hard working families" with mortgages. especially with an election to contest. I bloody hope not, but something has to give in all this.

Peace of mind is a price worth paying in my eyes. No one has a crystal ball, who'd thought we'd be where we are now even just 5 years ago?

Well - From what you've said I calculate the payment to be 1150.14.. you still owe 92961.79 at the end of Year 2.

With the same payment and a 2 year fix from (for example Coventry at 2.35%) you will owe 89398.09 at the end of year 2 - thats a saving of approx 3.5k in 2 years.

Or a 5 year fix at 2.95% -- 5k saved at the end of Year 5. (and only 56321.90 needed to bail her out if required then)

Or you pay another product fee out of the "saving" and fix it for another 2 or 5 years if interest rates are still low..

but I understand the "helicopter cash" scenario .. I can totally see it happening to people with mortgages because it is the "right thing to do, to help struggling families in their homes" or something ... As long as you know how much thats actually costing you I guess its a perfectly valid option.

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I see what you're saying, but I want to hedge against all possibilities, what if IR's are 9% in 7 years time, after a bond collapse or something, she couldn't afford the SVR mortgage she'd then be on, on a house that will be worth vastly less than when we bought (especially if IR's are that high.) She has every intention to overpay as it is (the mortgage is for 112k as she's putting in 20k in deposit)

Also I think it's a good idea to have some kind of a mortgage as it wouldn't surprise me if TPTB decide to throw some kind of helicopter money at "hard working families" with mortgages. especially with an election to contest. I bloody hope not, but something has to give in all this.

Peace of mind is a price worth paying in my eyes. No one has a crystal ball, who'd thought we'd be where we are now even just 5 years ago?

And the rest!

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Well - From what you've said I calculate the payment to be 1150.14.. you still owe 92961.79 at the end of Year 2.

With the same payment and a 2 year fix from (for example Coventry at 2.35%) you will owe 89398.09 at the end of year 2 - thats a saving of approx 3.5k in 2 years.

Or a 5 year fix at 2.95% -- 5k saved at the end of Year 5. (and only 56321.90 needed to bail her out if required then)

Or you pay another product fee out of the "saving" and fix it for another 2 or 5 years if interest rates are still low..

but I understand the "helicopter cash" scenario .. I can totally see it happening to people with mortgages because it is the "right thing to do, to help struggling families in their homes" or something ... As long as you know how much thats actually costing you I guess its a perfectly valid option.

The mortgage is based over 20 years, but it's a 10 year fix, the repayments being approx £658, not sure if that makes it a better or worse decision on your calculations, but would be interested to hear what you think as I've not shown a great deal of interest in it as I'm not paying it (just liable for half of it as my name is on it as well), however you have put the statement "if interest rates are still low" which is the big worry & main reason this has been chosen in these interesting times. All I know is £658 a month for 10 years is more than mangeable, & I'm a big fan of peace of mind over piece of ar5e.

As for bailing her out or me paying cash for the rest of the house & her paying me back with interest, I think that would start the relationship down a road I wouldnt want to go down (eg if interest rates were 9%, I couldnt charge her 9% interest even if I could get that from savings.) This way its as clear cut as it can be in our situation & we'll only annoy each other for the more trivial things in life ......hopefully.

Edited by membrane

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The mortgage is based over 20 years, but it's a 10 year fix, the repayments being approx £658, not sure if that makes it a better or worse decision on your calculations, but would be interested to hear what you think as I've not shown a great deal of interest in it as I'm not paying it (just liable for half of it as my name is on it as well), however you have put the statement "if interest rates are still low" which is the big worry & main reason this has been chosen in these interesting times. All I know is £658 a month for 10 years is more than mangeable, & I'm a big fan of peace of mind over piece of ar5e.

As for bailing her out or me paying cash for the rest of the house & her paying me back with interest, I think that would start the relationship down a road I wouldnt want to go down (eg if interest rates were 9%, I couldnt charge her 9% interest even if I could get that from savings.) This way its as clear cut as it can be in our situation & we'll only annoy each other for the more trivial things in life ......hopefully.

20 years ! thats a lot of interest.. if the payment stays 658 throughout the 20 years then the calculation is based on SVR staying at +1.95% of base rate.. Fat chance of that happening if you ask me !

Of the 658 pounds - between 372.4 and 361.78 go towards paying interest for the first year. 234.05 at the end of Year 10. and you still owe 69967.62 .. I would really stress that overpaying is good in that case! (or saving separately to drop the principal using a lump sum when its time to re-mortgage)

Anyway - you've already taken the mortgage out so there is no point in me trying to argue "10 year fix is too expensive". Enjoy 10 years of peace of mind :) And who knows maybe she can find 70k from now till then and not have to remortgage ..

I could be very wrong and SVR on a mortgage might jump to 10% 5 years from now (8.05% base rate) ... in which case your monthly payment will jump to £925 a month for the last 10 years on SVR.. but you will have saved a *LOT* in years 5 to 10 ...

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I could be very wrong and SVR on a mortgage might jump to 10% 5 years from now (8.05% base rate) ... in which case your monthly payment will jump to £925 a month for

Just noticed a slight error - above should be +9.50 base rate - rest is correct I think .. Anyway it doesn't matter as the + would change anyway!

I also just realised I didn't re-do the comparison with the lesser fixes

the extra 8 years of peace of mind costs (compared to the Coventry 2.35% rate) : £3645.54 at the end of Year 2 (after that we have uncertainty..)

and the extra 5 years at 2.95% : £5776.87 by the end of Year 5 (again after that who knows..)

Doing all these calculations - I feel rather exposed, having taken a 2 year fix myself (on a slightly larger loan)... but hey - its a problem for 2 years from now. ( la la la la laaaaa )

Hopefully 10 year fixes will still be at 3.99 in 2 years :)

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Just noticed a slight error - above should be +9.50 base rate - rest is correct I think .. Anyway it doesn't matter as the + would change anyway!

I also just realised I didn't re-do the comparison with the lesser fixes

the extra 8 years of peace of mind costs (compared to the Coventry 2.35% rate) : £3645.54 at the end of Year 2 (after that we have uncertainty..)

and the extra 5 years at 2.95% : £5776.87 by the end of Year 5 (again after that who knows..)

Doing all these calculations - I feel rather exposed, having taken a 2 year fix myself (on a slightly larger loan)... but hey - its a problem for 2 years from now. ( la la la la laaaaa )

Hopefully 10 year fixes will still be at 3.99 in 2 years :)

Thanks for that & yes I do agree to a certain extent, but I've always been up for the short term pain, long term gain, hence the whole position I'm in now to start with. She has every intention of overpaying by as much as possible (may not make the 10k a year max over payment allowable in the first couple of years) & I agree rates arn't going anywhere upward for a couple of years at least barring a real shock, it's years 4 onwards that could give sleepless nights.

Come the end of the fix any residual mortgage left I could stump up if neccesary, but who knows what state we'll be in by then? A 6k loss after 5 years for an insomnia free decade is a hit we're willing to take (especially as I'm not taking it) I/we could be quids in depending on the scenario.

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Just bought as well. Paying a fair amount, no bargain.

I'm not interested in making any money on this, I'm just fed up with crappy letting agents and want some land to grow veges and be more self-sustaining. Nothing available to rent with land.

HTB is the other elephant in the room - its certainly going to cause another bubble (that's the aim, right?) and create another bust but will it re-set to below current levels or not. I don't know but the other two reasons above have swayed me to buy. Also, this cuts my commute down from 90 min each way to just under an hour. That's 200 odd extra hours a year!!!

Edited by Does Commute Abit

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  • 337 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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