70PC Posted October 9, 2023 Share Posted October 9, 2023 Except it is not 3.35%. "Skipton has launched a range of two-year fixed mortgages to help borrowers at risk of payment difficulties, but they carry a 5% fee." https://www.standard.co.uk/business/money/skipton-building-society-launches-mortgages-as-low-as-3-35-to-support-members-b1112332.html Quote Link to comment Share on other sites More sharing options...
Frankie Teardrop Posted October 9, 2023 Share Posted October 9, 2023 Negative amortisation mortgages making a reappearance. Whatever could go wrong... Quote Link to comment Share on other sites More sharing options...
Stewy Posted October 9, 2023 Share Posted October 9, 2023 I think the buying opportunity of this decade has passed now. Quote Link to comment Share on other sites More sharing options...
Housepricecrash91 Posted October 9, 2023 Share Posted October 9, 2023 5% fee on the existing loan added to the balance? Isn't that going to add up to significant more than paying a higher interest rate mortgage? So basically you would just be kicking the can down the road? Quote Link to comment Share on other sites More sharing options...
Dames Posted October 9, 2023 Share Posted October 9, 2023 Members only , charging you pretty much half your 10% deposit. Fag packet £300k price , 10% deposit £30k , 5% fee on £270k. So were happy to help you but it's gonna cost you £13.5k for some forbearance. stbc of course D Quote Link to comment Share on other sites More sharing options...
captainb Posted October 9, 2023 Share Posted October 9, 2023 18 minutes ago, Dames said: Members only , charging you pretty much half your 10% deposit. Fag packet £300k price , 10% deposit £30k , 5% fee on £270k. So were happy to help you but it's gonna cost you £13.5k for some forbearance. stbc of course D Not really designed for them as it states. More coming towards the end and can't afford the interest hike but could afford to pay for a couple more years. It's effectively a mortgage extension. Other option would be to go IO for a couple of years. Quote Link to comment Share on other sites More sharing options...
reddog Posted October 9, 2023 Share Posted October 9, 2023 Hold on. It is a 2 year mortgage. If there is a 5% fee how does that ever make sense? Quote Link to comment Share on other sites More sharing options...
A.steve Posted October 9, 2023 Share Posted October 9, 2023 6 minutes ago, reddog said: Hold on. It is a 2 year mortgage. If there is a 5% fee how does that ever make sense? It makes sense because it's equivalent to a >6% mortgage rate. Quote Link to comment Share on other sites More sharing options...
Huggy Posted October 9, 2023 Share Posted October 9, 2023 2 hours ago, Housepricecrash91 said: So basically you would just be kicking the can down the road? and then screaming for a bailout when the road ends. Quote Link to comment Share on other sites More sharing options...
Huggy Posted October 9, 2023 Share Posted October 9, 2023 (edited) BBC Panorama right now. "Mortgage rate rises are hitting homeowners HARD" Edit. I have the Liz Truss mini budget bingo card on hand. Edited October 9, 2023 by Huggy Quote Link to comment Share on other sites More sharing options...
17clarence Posted October 9, 2023 Share Posted October 9, 2023 6 minutes ago, Huggy said: BBC Panorama right now. "Mortgage rate rises are hitting homeowners HARD" Edit. I have the Liz Truss mini budget bingo card on hand. 😄you know it’s starting to bite when the ‘woe is me’ is on. Expect a wide range of D&I for no reason either. Quote Link to comment Share on other sites More sharing options...
17clarence Posted October 9, 2023 Share Posted October 9, 2023 A lot of them look like they could reduce their food intake to save a few quid. Quote Link to comment Share on other sites More sharing options...
17clarence Posted October 9, 2023 Share Posted October 9, 2023 Benevolent Landlords letting houses below market rates. This program has it all. Quote Link to comment Share on other sites More sharing options...
Huggy Posted October 9, 2023 Share Posted October 9, 2023 11 minutes ago, 17clarence said: 😄you know it’s starting to bite when the ‘woe is me’ is on. Expect a wide range of D&I for no reason either. Landlord with 9 pwoperdehs is not liking his alternative pension prospects Quote Link to comment Share on other sites More sharing options...
reddog Posted October 9, 2023 Share Posted October 9, 2023 What's D&I? Quote Link to comment Share on other sites More sharing options...
17clarence Posted October 9, 2023 Share Posted October 9, 2023 9 minutes ago, reddog said: What's D&I? Diversity and Inclusion. Quote Link to comment Share on other sites More sharing options...
VancouverGuy Posted October 9, 2023 Share Posted October 9, 2023 5 hours ago, Frankie Teardrop said: Negative amortisation mortgages making a reappearance. Whatever could go wrong... Negative ams are all the rage in Canada right now. About a third of ALL mortgages grow their principal each month. Check back in a couple of years to see how that's worked out. Quote Link to comment Share on other sites More sharing options...
dpg50000 Posted October 9, 2023 Share Posted October 9, 2023 4 minutes ago, VancouverGuy said: Negative ams are all the rage in Canada right now. About a third of ALL mortgages grow their principal each month. Check back in a couple of years to see how that's worked out. Do you have a link for that? Sounds incredibly risky and unsustainable. Quote Link to comment Share on other sites More sharing options...
fellow Posted October 9, 2023 Share Posted October 9, 2023 Yet more reasons to: Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted October 9, 2023 Share Posted October 9, 2023 Because the deal carries a fee of 5% of the existing loan amount then the rate is actually 5% plus their "low 3.35%" on top. Therefore, it's basically 8% + rate in reality. If you borrow £100,000 then you pay £5,000 as part of the fee (is that added onto your monthly payments or one off fee?) plus the 3.35% rate. I assume if that fee of 5% is added onto your monthly payments and not a one off fee then there will be interest on top that initial interest too. Bit of false advertising really if you ask me. They should not be allowed to do this. Then again people should be able to see it for what it is shouldn't they? Quote Link to comment Share on other sites More sharing options...
Lagarde's Drift Posted October 9, 2023 Share Posted October 9, 2023 7 minutes ago, The Angry Capitalist said: Because the deal carries a fee of 5% of the existing loan amount then the rate is actually 5% plus their "low 3.35%" on top. Therefore, it's basically 8% + rate in reality. If you borrow £100,000 then you pay £5,000 as part of the fee (is that added onto your monthly payments or one off fee?) plus the 3.35% rate. I assume if that fee of 5% is added onto your monthly payments and not a one off fee then there will be interest on top that initial interest too. Bit of false advertising really if you ask me. They should not be allowed to do this. Then again people should be able to see it for what it is shouldn't they? If the fee is 5% for 2yrs then roughly soeaki f it's a 5.85% mortgage? A little more cos of the increase in capital? Quote Link to comment Share on other sites More sharing options...
captainb Posted October 9, 2023 Share Posted October 9, 2023 (edited) 13 minutes ago, The Angry Capitalist said: Because the deal carries a fee of 5% of the existing loan amount then the rate is actually 5% plus their "low 3.35%" on top. Therefore, it's basically 8% + rate in reality. If you borrow £100,000 then you pay £5,000 as part of the fee (is that added onto your monthly payments or one off fee?) plus the 3.35% rate. I assume if that fee of 5% is added onto your monthly payments and not a one off fee then there will be interest on top that initial interest too. Bit of false advertising really if you ask me. They should not be allowed to do this. Then again people should be able to see it for what it is shouldn't they? Not how maths works..... Disregarding capital repayments for ease. You owe 100. There's a 5% fee. You owe 105 day 1. You pay 3.35% of 105 = 3.675% of the original 100. Of course at the end of the 2 years your back owing depending on the length of the loan prob not much less than you originally borrowed but your bet is rates have dropped by then. It's like going IO. But fair comparison is 3.65% plus approx 2.5% so around 6.1% not 8%. Edited October 9, 2023 by captainb Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted October 9, 2023 Share Posted October 9, 2023 22 minutes ago, captainb said: Not how maths works..... Disregarding capital repayments for ease. You owe 100. There's a 5% fee. You owe 105 day 1. You pay 3.35% of 105 = 3.675% of the original 100. Of course at the end of the 2 years your back owing depending on the length of the loan prob not much less than you originally borrowed but your bet is rates have dropped by then. It's like going IO. But fair comparison is 3.65% plus approx 2.5% so around 6.1% not 8%. If that's how it's structured then it's even worse than I initially thought. Suppose it keeps people in debt for longer which helps the banks, I suppose. Perhaps it can prevent defaults in some cases. Quote Link to comment Share on other sites More sharing options...
captainb Posted October 9, 2023 Share Posted October 9, 2023 10 minutes ago, The Angry Capitalist said: If that's how it's structured then it's even worse than I initially thought. Suppose it keeps people in debt for longer which helps the banks, I suppose. Perhaps it can prevent defaults in some cases. That's who it's aimed at, not everyone. Quote Link to comment Share on other sites More sharing options...
scottbeard Posted October 9, 2023 Share Posted October 9, 2023 4 hours ago, reddog said: Hold on. It is a 2 year mortgage. If there is a 5% fee how does that ever make sense? A 3.35% rate plus half of 5% means 5.55% in total which is still a decent 2 year fix currently Quote Link to comment Share on other sites More sharing options...
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