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How many interest-only borrowers are paying off their mortgage

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"It's estimated that around 600,000 people have interest-only mortgages that will mature by 2020."

" Interest-only borrowers are typically 70-years-old and have £66,035 in outstanding debt, according to analysis last year by Age Partnership."

http://www.express.co.uk/finance/personalfinance/802706/Interest-only-mortgage-repayment-equity-release-pay-debts-borrowers

 

 

Ouroboros?

Or maybe Ouroborrows?

 

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Borrowers or mortgages?

If its 600,000 then thats ~2m people live in a house with no repayment plan.

Number paying off IO mortgages - probably 5%.

IO mortgages are and always have been a specialist, expensive product. Not mass market.

 

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3 minutes ago, spyguy said:

Borrowers or mortgages?

If its 600,000 then thats ~2m people live in a house with no repayment plan.

Number paying off IO mortgages - probably 5%.

IO mortgages are and always have been a specialist, expensive product. Not mass market.

 

I have met at least 3 people who have them - I don't think any of them have a plan.

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I know a 50 year old who bought in 2002 for £300k on IO and has no repayment vehicle. In London, so property has gone up a lot, will still have to sell in a few years though. 

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1 hour ago, iamnumerate said:

I have met at least 3 people who have them - I don't think any of them have a plan.

I have an ex-friend BTLer who was living off the rents of his houses whilst having I/O mortgages.

When I asked how he intended to pay off the debt he said.....( and you can search through the archive as I report this at the time )...something along the lines of.....I'll re-mortgage and take out a new I/O deal.

Good luck with that mate.

I've distanced myself from him now, I cannot stand people like this anymore.

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I have an interest only mortgage, recently renewed with yet another 2 year low interest deal. This time 1.5%.

The bank has always hassled me about my repayment vehicle, but admittedly has not asked for documented proof. They have this month sent out a form asking me to state my repayment method, listing various options, and with mine being a shares isa they wanted to know how much was presently in the isa and how much longer it was likely to be before the funds would be available to pay off the mortgage.

It could be that the banks are getting close to shutting down the interest only option.

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25 minutes ago, Unexpected said:

I have an interest only mortgage, recently renewed with yet another 2 year low interest deal. This time 1.5%.

The bank has always hassled me about my repayment vehicle, but admittedly has not asked for documented proof. They have this month sent out a form asking me to state my repayment method, listing various options, and with mine being a shares isa they wanted to know how much was presently in the isa and how much longer it was likely to be before the funds would be available to pay off the mortgage.

It could be that the banks are getting close to shutting down the interest only option.

Very interesting. They might be getting cold feet and are waking up to what is around the corner.

Who is the lender?

In terms of providing documentary proof,they probably do not have anyway of contractually forcing you to provide it. After all, they did not question it at the time. 

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2 hours ago, Unexpected said:

I have an interest only mortgage, recently renewed with yet another 2 year low interest deal. This time 1.5%.

The bank has always hassled me about my repayment vehicle, but admittedly has not asked for documented proof. They have this month sent out a form asking me to state my repayment method, listing various options, and with mine being a shares isa they wanted to know how much was presently in the isa and how much longer it was likely to be before the funds would be available to pay off the mortgage.

It could be that the banks are getting close to shutting down the interest only option.

This is part of the MMR. I believe every single interest only customer will be asked every few years how they intend to repay the capital. 

Interest only for resi is pretty much dead. 

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2 hours ago, Unexpected said:

I have an interest only mortgage, recently renewed with yet another 2 year low interest deal. This time 1.5%.

The bank has always hassled me about my repayment vehicle, but admittedly has not asked for documented proof. They have this month sent out a form asking me to state my repayment method, listing various options, and with mine being a shares isa they wanted to know how much was presently in the isa and how much longer it was likely to be before the funds would be available to pay off the mortgage.

It could be that the banks are getting close to shutting down the interest only option.

I dont think Joe Punter can get an IO mortgage anymore.

They are very rare.

IO was he last refuge if IO BTLers.

As far as IO mortgages go - Consumer and BTLer - is what happens when Basel3 rules come in.

My guess is that a ban will be required to hold a *lot* more capital for IO lending, basically killing it for regulated banks.

Then it comes to - How will they get IO off their books?

I think the UK will see vastly increasing IRs for OP - think 10%+ - to force IO mortgages onto repayment mortgages.

 

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I know several people with IO mortgages and I don't think they have a clue or understand them. They think because they are paying a mortgage they are paying for their house.

I gave up trying to explain the difference between IO and repayment years ago.

BF

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5 minutes ago, BLOW FLY said:

I know several people with IO mortgages and I don't think they have a clue or understand them. They think because they are paying a mortgage they are paying for their house.

I gave up trying to explain the difference between IO and repayment years ago.

BF

My parents thought that stamp duty is paid for by sellers. When I explained it to them,my Mum also couldn't understand why people complain about a massive tax on moving house.

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7 minutes ago, BLOW FLY said:

I know several people with IO mortgages and I don't think they have a clue or understand them. They think because they are paying a mortgage they are paying for their house.

I gave up trying to explain the difference between IO and repayment years ago.

BF

Are people really that thick ?

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Just now, TheCountOfNowhere said:

Are people really that thick ?

I once met someone who thought that dinosaurs still exist, then again she didn't work and had a nicer house than me (paid for by the tax payer) so who is thick me or her?

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My worry is that loads of folk will say "we wiz defrauded, the bank wot lied to us, wez just simples folks and we need bailouts to help us or we will be homeless" Then years of stupidity will be rewarded

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26 minutes ago, TheCountOfNowhere said:

Are people really that thick ?

Honestly, yes.

One girl I was talking to was bragging how she'd bought her house and got an amazing deal on her mortgage because she'd 'negotiated' IO.

I asked her how she was going to pay for the house when the IO term ended and she looked all confused and said something what do you mean, it will be paid for by the mortgage won't it.... I then changed the subject because frankly it wasn't worth the effort.

That was about three or four years ago now mind, so the penny might have dropped by now.

 

BF

 

 

 

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How many interest-only borrowers are paying off their mortgage

 

Not paying off the mortgage if only paying the interest.;)

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In France a study showed that 60% of the population did not know how much there will be in a year time on the bank account if they placed €100 at a APR of 2% 

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5 hours ago, TheCountOfNowhere said:

I have an ex-friend BTLer who was living off the rents of his houses whilst having I/O mortgages.

When I asked how he intended to pay off the debt he said.....( and you can search through the archive as I report this at the time )...something along the lines of.....I'll re-mortgage and take out a new I/O deal.

Good luck with that mate.

I've distanced myself from him now, I cannot stand people like this anymore.

"James said I could always re-finance" (The Big Short) 

 

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2 hours ago, spyguy said:

As far as IO mortgages go - Consumer and BTLer - is what happens when Basel3 rules come in.

Not the first time you mention it, care to provide supporting links?

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7 minutes ago, Freki said:

Not the first time you mention it, care to provide supporting links?

Basel3?

Or IO being banned?

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We took out an IO mortgage in the 70s, an endowment mortgage linked to a life insurance policy. They were very popular at the time and many did well out of them but the bottom fell out of the endowment market and we were lucky to be able to pay off the principal at half term and cash in the endowment policy whilst it was still worth something. Others were not so fortunate.

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These people will be glad to hear Support for Mortgage Interest turns into a loan from 2018 and all claims go from a benefit to a loan including people already on the system.Interest added,plus other costs.It will soon add up to a big second charge on the property.It will be interesting to see what happens when there is no equity.Try to re-mortgage later with a big fat second charge on the house the bank will say no.We dont have the details yet about how the loans will work,and how the repayments work once back in work.Get back in work quickly,or see all equity go as a second charge.Property is no longer your pension.

https://www.whatdotheyknow.com/request/323702/response/790160/attach/html/3/FoI 1066 Mr Stevenson SMI loans reply 2016 03 31.doc.html

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3 hours ago, iamnumerate said:

My parents thought that stamp duty is paid for by sellers. When I explained it to them,my Mum also couldn't understand why people complain about a massive tax on moving house.

Stamp duty is another aspect of the intergenerational inequality of HPI. Not only did the older generations buy their huge properties cheaply but they didn't have to pay stamp duty. So young people have to pay more tax for the privilege of having to buy a very expensive (but much smaller) property in order to have a roof over their heads. It's a double whammy.

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21 minutes ago, fru-gal said:

Stamp duty is another aspect of the intergenerational inequality of HPI. Not only did the older generations buy their huge properties cheaply but they didn't have to pay stamp duty. So young people have to pay more tax for the privilege of having to buy a very expensive (but much smaller) property in order to have a roof over their heads. It's a double whammy.

I agree 100%.  My parents didn't pay the equivalent of 10 months salary to buy their house - thanks BBC - Blair Brown Cameron.

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1 hour ago, durhamborn said:

These people will be glad to hear Support for Mortgage Interest turns into a loan from 2018 and all claims go from a benefit to a loan including people already on the system.Interest added,plus other costs.It will soon add up to a big second charge on the property.It will be interesting to see what happens when there is no equity.Try to re-mortgage later with a big fat second charge on the house the bank will say no.We dont have the details yet about how the loans will work,and how the repayments work once back in work.Get back in work quickly,or see all equity go as a second charge.Property is no longer your pension.

https://www.whatdotheyknow.com/request/323702/response/790160/attach/html/3/FoI 1066 Mr Stevenson SMI loans reply 2016 03 31.doc.html

Ahh yes, Brown's great 'Im not fcking useless' scheme to bail out home owenrs at the cost of non home owners.

Why any one under 40 would consider voting Labour after that twt is beyond me - theyll fckup and bail out the rich and old agan.

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