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jonewer

Io Infinite Loans

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Can someone tell me how an IO mortgage has an (potentially) infinite life span?

Surely the day of reckoning must come when you are asked to pay back the money?

Or can you negotiate an IO with no doomsday?

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As long as the lender gets paid the interest owed on the mortgage, it does matter if it's 25 or 100 years.

Some will say it's the same as renting but there IS oportunity to make a capital profit it you buy rather than rent.

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That's called 'renting' isn't it?

Yes and no.

Just answer the question- why are you dressed as a Tiger?

Edited by jonewer

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if you get a 25 year IO morgage you still have to pay it off in 25 years, so its not infinate. Your supposed to have an additional investment vehicle with an IO morgage so you can pay off... However BTLers are banking on the fact this is a second property and captial gains and inflation will erode the debt away (like in the 70s...). The theory is if the minimum wage is 300k a year in 10 years time we wont be worrying about paying off our morgage, unfortunatly the theory is flawed and money doesnt grow on trees (unless your the BOE and money supply is at 12% ;p)

oh what a funny economic time we live in :) what to do? what to do?

Edited by moosetea

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if you get a 25 year IO morgage you still have to pay it off in 25 years, so its not infinate. Your supposed to have an additional investment vehicle with an IO morgage so you can pay off... However BTLers are banking on the fact this is a second property and captial gains and inflation will erode the debt away (like in the 70s...). The theory is if the minimum wage is 300k a year in 10 years time we wont be worrying about paying off our morgage, unfortunatly the theory is flawed and money doesnt grow on trees (unless your the BOE and money supply is at 12% ;p)

oh what a funny economic time we live in :) what to do? what to do?

Moosetea, do you drink moose tea?

Just wondering...

:unsure:

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if you get a 25 year IO morgage you still have to pay it off in 25 years, so its not infinate. Your supposed to have an additional investment vehicle with an IO morgage so you can pay off... However BTLers are banking on the fact this is a second property and captial gains and inflation will erode the debt away (like in the 70s...). The theory is if the minimum wage is 300k a year in 10 years time we wont be worrying about paying off our morgage, unfortunatly the theory is flawed and money doesnt grow on trees (unless your the BOE and money supply is at 12% ;p)

oh what a funny economic time we live in :) what to do? what to do?

http://business.guardian.co.uk/story/0,3604,843624,00.html

Third, Mr King is nervous that homeowners may not realise that although low interest rates make mortgage repayments affordable, high inflation will not erode the value of their borrowing, as it did in the 1970s - and when they do catch on, house prices will plunge.

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  • 301 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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