I Told You So Posted June 7, 2006 Share Posted June 7, 2006 A friend recently said "you do realise that banks are now offering longer term mortgages, 30 years and upwards so that will support the property market going forward" me "what do you think an interest only mortgage is then?" Him "what do you mean" me "well you choose, its effectively 30, 50 or more years as you never pay off the debt" Him "Oh I see what you mean" Its amazing just how gullable most of the public are. Quote Link to comment Share on other sites More sharing options...
watchinandwaiting Posted June 7, 2006 Share Posted June 7, 2006 A friend recently said "you do realise that banks are now offering longer term mortgages, 30 years and upwards so that will support the property market going forward" me "what do you think an interest only mortgage is then?" Him "what do you mean" me "well you choose, its effectively 30, 50 or more years as you never pay off the debt" Him "Oh I see what you mean" Its amazing just how gullable most of the public are. Yes but IOM's still have a term, they have to be paid of by a capital repayment at the end of the term. Quote Link to comment Share on other sites More sharing options...
Guest Guy_Montag Posted June 7, 2006 Share Posted June 7, 2006 No bank is going to lend over more than 30, maybe 35 years. 50 years is right out, debt cannot be passed on to the next generation. Quote Link to comment Share on other sites More sharing options...
watchinandwaiting Posted June 7, 2006 Share Posted June 7, 2006 100k motgage at 10% over 25years £908 month total £272,610 over 50years £839 month total £503,463 can't see much point! Quote Link to comment Share on other sites More sharing options...
I Told You So Posted June 7, 2006 Author Share Posted June 7, 2006 Exactly there is no point its just desperate people cluthing at straws looking for something that will save the housing market. You still have to pay the interest on the loan no matter how long its spread over and when rates go up the loan becomes unaffordable. Quote Link to comment Share on other sites More sharing options...
Guest Baffled_by_it_all Posted June 7, 2006 Share Posted June 7, 2006 EA I went to view a property with was quacking on about 'bi-generational' mortgages. He said, 'when they come in the market's going to go wild.' He then told me he'd got a massive IO mortgage to buy the biggest place he could afford. Obviously he believes what he's shovelling... Quote Link to comment Share on other sites More sharing options...
camem' Posted June 7, 2006 Share Posted June 7, 2006 No bank is going to lend over more than 30, maybe 35 years. 50 years is right out, debt cannot be passed on to the next generation. passing debt onto the next generation was standard in Japan for a bit (40-50 yr mortgages). Until property lost 40% of it's value in nominal terms, that is Quote Link to comment Share on other sites More sharing options...
Without_a_Paddle Posted June 7, 2006 Share Posted June 7, 2006 (edited) 100k motgage at 10% over 25years £908 month total £272,610 over 50years £839 month total £503,463 can't see much point! ..and I can't see much point in showing figures with 10% IR. If you went with 10yr fixed at 4.7% the figures would be £433 vs £567 which equates to a useful £134pm saving. (repayment mortgage) If the 50yr mortgage allowed overpayment then you could have extra flexibility each month to the tune of £134pm. For example, if you are doing well with your income you can up the monthly payments to the same as the 25yr mortgage. If you get some big bills in you can drop back to the lower payments. This may suit people who are self employed and on a less than steady income each month. (assuming you can actually get a 50yr mortgage with 10yr fixed at 4.7%, that is!!!) Edited June 7, 2006 by Without_a_Paddle Quote Link to comment Share on other sites More sharing options...
Converted Lurker Posted June 7, 2006 Share Posted June 7, 2006 ..and I can't see much point in showing figures with 10% IR. If you went with 10yr fixed at 4.7% the figures would be £433 vs £567 which equates to a useful £134pm saving. (repayment mortgage) If the 50yr mortgage allowed overpayment then you could have extra flexibility each month to the tune of £134pm. For example, if you are doing well with your income you can up the monthly payments to the same as the 25yr mortgage. If you get some big bills in you can drop back to the lower payments. This may suit people who are self employed and on a less than steady income each month. (assuming you can actually get a 50yr mortgage with 10yr fixed at 4.7%, that is!!!) I agree with wap on this, the term is irrelevant if you make a conscious effort to pay the loan down asap. Instead of the average age of the FTB being 35 it could revert back to 25...food for thought Quote Link to comment Share on other sites More sharing options...
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