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tahoma

Using Gold To Pay A Mortgage

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Here's an idea.

Supposing, as many do on here, you have a significant amount of Gold tucked away. Why not buy a house IO (gulp) and, if as commonly predicted there is high inflation with the associated hike in the Gold price, you could use the increasing nominal value of the yellow metal to pay the capital off progressively, lowering the interest payments as per a repayment mortgage.

Seems to get around the high price inflation / low wage inflation conundrum. Not exactly HPC friendly but at least you get to exploit the mess the world is heading for.

Comments / laughter / abuse?

Edited by tahoma

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Here's an idea.

Supposing, as many do on here, you have a significant amount of Gold tucked away. Why not buy a house IO (gulp) and, if as commonly predicted there is high inflation with the associated hike in the Gold price, you could use the increasing nominal value of the yellow metal to pay the capital off progressively, lowering the interest payments as per a repayment mortgage.

Seems to get around the high price inflation / low wage inflation conundrum. Not exactly HPC friendly but at least you get to exploit the mess the world is heading for.

Comments / laughter / abuse?

Jolly good idea.

Unless the widely predicted rise in the price of gold is all BS from gold-rampers and the price falls back once they've cashed in on the goldbug sheeple... in which case you'd be screwed ;)

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Jolly good idea.

Unless the widely predicted rise in the price of gold is all BS from gold-rampers and the price falls back once they've cashed in on the goldbug sheeple... in which case you'd be screwed ;)

Never mind, in the meantime the house will have gone up in price. They always do!

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Here's an idea.

Supposing, as many do on here, you have a significant amount of Gold tucked away. Why not buy a house IO (gulp) and, if as commonly predicted there is high inflation with the associated hike in the Gold price, you could use the increasing nominal value of the yellow metal to pay the capital off progressively, lowering the interest payments as per a repayment mortgage.

Seems to get around the high price inflation / low wage inflation conundrum. Not exactly HPC friendly but at least you get to exploit the mess the world is heading for.

Comments / laughter / abuse?

Its a better idea for an 'investment vehicle' to pay off capital than most with an IO mortgage.

I'm sure "What capital?" will be a question asked by many in the future when millions realise they've been renting for last 20 years

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Here's an idea.

Supposing, as many do on here, you have a significant amount of Gold tucked away. Why not buy a house IO (gulp) and, if as commonly predicted there is high inflation with the associated hike in the Gold price, you could use the increasing nominal value of the yellow metal to pay the capital off progressively, lowering the interest payments as per a repayment mortgage.

Seems to get around the high price inflation / low wage inflation conundrum. Not exactly HPC friendly but at least you get to exploit the mess the world is heading for.

Comments / laughter / abuse?

The good thing is that at least you are diversifying in to two assets, gold and property. The bad thing is that property is already at historic highs against any traditional measure and gold has already risen significantly. Why don't you rent and put your money in ING direct getting 3.6% net after tax with no risk. Then sit back and wait for the markets to turn in your favour. The move has already started. Let me put it another way - have you ever seen somethin that you really liked but thought it was way too expensive so you decided to wait for the sales to buy it cheaper. Property is like that only the distance between sales is longer. The last sale however was during the 90's so another one is imminent

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The good thing is that at least you are diversifying in to two assets, gold and property. The bad thing is that property is already at historic highs against any traditional measure and gold has already risen significantly. Why don't you rent and put your money in ING direct getting 3.6% net after tax with no risk. Then sit back and wait for the markets to turn in your favour. The move has already started. Let me put it another way - have you ever seen somethin that you really liked but thought it was way too expensive so you decided to wait for the sales to buy it cheaper. Property is like that only the distance between sales is longer. The last sale however was during the 90's so another one is imminent

Agreed, it was a hypothetical question - I would not buy until houses were widely accepted to be on the slide. Still, if Gold does look like it's going to the moon it could be a means to get back into the market for people sick of renting.

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Why not just rent a house and keep the gold, buy a house later when you feel secure enough to do so?

Miles ahead of you Adam... :)

Edited by tahoma

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Here's an idea.

Supposing, as many do on here, you have a significant amount of Gold tucked away. Why not buy a house IO (gulp) and, if as commonly predicted there is high inflation with the associated hike in the Gold price, you could use the increasing nominal value of the yellow metal to pay the capital off progressively, lowering the interest payments as per a repayment mortgage.

Seems to get around the high price inflation / low wage inflation conundrum. Not exactly HPC friendly but at least you get to exploit the mess the world is heading for.

Comments / laughter / abuse?

I saw some figures once that suggested that instead of buying a house way back in the 70s if you had bought gold, you could now buy 2 houses of the value your house would have realised.

Again, timing is of the essence.

Hindsight, wonderful thing.

It's one of attributes that so many ignore instead believing that everybody used to have a crystal ball & was aware of the implications of their actions.

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I saw some figures once that suggested that instead of buying a house way back in the 70s if you had bought gold, you could now buy 2 houses of the value your house would have realised.

Except you'd have been paying rent for thirty years, which probably eats up the money for the second house and more. Plus the figures were almost certainly based on comparing gold's historic low against one of its historic peaks. BS in other words...

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I saw some figures once that suggested that instead of buying a house way back in the 70s if you had bought gold, you could now buy 2 houses of the value your house would have realised.

And actually I just ran the figures and this fact is plain wrong for the UK. (Maybe it is true in America though I suspect it is goldrampers nonsense even there).

About the most generous assumption you can start from is the gold low of about $50 (£20) against £10,000 average house price in 1974 (Nationwide figures) - so about 500 ounces buys the average house.

Now average house price £160K, gold $625 ($338) so 474 ouces buys the average house - only slightly better, and even that is helped by the exchange rate and the fact that we are starting from the most generous point I can find in the 1970s. If I wanted to twist things I'd start from the early seventies, when gold was the same and property half the price, in which case I could claim that you need a damn sight more gold to buy a house now.

The moral of the story - don't believe goldbugs without checking their facts.

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And actually I just ran the figures and this fact is plain wrong for the UK. (Maybe it is true in America though I suspect it is goldrampers nonsense even there).

About the most generous assumption you can start from is the gold low of about $50 (£20) against £10,000 average house price in 1974 (Nationwide figures) - so about 500 ounces buys the average house.

Now average house price £160K, gold $625 ($338) so 474 ouces buys the average house - only slightly better, and even that is helped by the exchange rate and the fact that we are starting from the most generous point I can find in the 1970s. If I wanted to twist things I'd start from the early seventies, when gold was the same and property half the price, in which case I could claim that you need a damn sight more gold to buy a house now.

The moral of the story - don't believe goldbugs without checking their facts.

Phew! saved myself a fortune then.

Thanks for the extensive research by the way, wasn't gold $700 a little while back.

Timing is of the essence.

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Phew! saved myself a fortune then.

Thanks for the extensive research by the way, wasn't gold $700 a little while back.

Timing is of the essence.

It got to about $720 then fell back to $550 before coming back up. Maybe it will go a lot further up, as some predict - it's actually been a pretty bad store of value over the last thirty years, increasing very slowly with some quite steep spikes and crashes. But the long-term comparison might mean that it is still a bit underpriced. I'm not saying don't buy it. Just don't buy too much goldbug BS... ;)

Edited by Magpie

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  • 335 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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