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The 'deathbed' Mortgage

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I was wondering about this new 'Deathbed' mortgage.

Could this be a good thing for bears?

If this proves popular and lots of dopey FTB's take it up, could the following possibly happen ............ ?

1. All the FTB's suddenly want to buy rather than rent as they think this will be cheaper for them (although I understand

that it will eventually end up costing them more).

2. This could stop them wanting to rent as they will think why rent 'properly' when the can 'buy' a property with the 'Death bed' mortgage. (which amounts to the same thing but at least their family will 'inherit' the property).

3. There will be a glut of BTL properties on the market, which will eventually cause the market to crash !

AM I BEING TOO SIMPLISTIC ? :huh:

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I was wondering about this new 'Deathbed' mortgage.

Could this be a good thing for bears?

If this proves popular and lots of dopey FTB's take it up, could the following possibly happen ............ ?

1. All the FTB's suddenly want to buy rather than rent as they think this will be cheaper for them (although I understand

that it will eventually end up costing them more).

2. This could stop them wanting to rent as they will think why rent 'properly' when the can 'buy' a property with the 'Death bed' mortgage. (which amounts to the same thing but at least their family will 'inherit' the property).

3. There will be a glut of BTL properties on the market, which will eventually cause the market to crash !

AM I BEING TOO SIMPLISTIC ? :huh:

Yes. The BTLers who want to sell would sell them at a high price to the FTBs, who of course could "afford" to pay a high price for them.

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with this mortgage do you have to keep paying the intrest till the day you die? if so how are people going to afford payments when they retire?

What a crappy last clutching of straws for the property market! :huh:

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with this mortgage do you have to keep paying the intrest till the day you die? if so how are people going to afford payments when they retire?

What a crappy last clutching of straws for the property market! :huh:

It is pretty crappy, IMO. But I guess it works in the expectation that the interest payments will be small by retirement age.

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with this mortgage do you have to keep paying the intrest till the day you die? if so how are people going to afford payments when they retire?

What a crappy last clutching of straws for the property market! :huh:

Well spotted - that appears to be the obvious flaw. Most old people rely on having their mortgage paid off and no payments for housing to make (unless they are already renting of course) in their old age. If you need to pay the interest up until you pop your clogs, you will need to factor that into your pension (thus negating the lower mortgage payments). If your family 'inherit' early, they will need to make double payments, to pay the interest on your property and the interest/rent on their own!! Can't see this getting off the ground.

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Well spotted - that appears to be the obvious flaw. Most old people rely on having their mortgage paid off and no payments for housing to make (unless they are already renting of course) in their old age. If you need to pay the interest up until you pop your clogs, you will need to factor that into your pension (thus negating the lower mortgage payments). If your family 'inherit' early, they will need to make double payments, to pay the interest on your property and the interest/rent on their own!! Can't see this getting off the ground.

YES, I was wondering about the 'retirement' side of this.

The last thing a retiree wants is a £900 a month mortgage round their neck (or worse).

I'm sure the VI's will have thought of something though !

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Well spotted - that appears to be the obvious flaw. Most old people rely on having their mortgage paid off and no payments for housing to make (unless they are already renting of course) in their old age. If you need to pay the interest up until you pop your clogs, you will need to factor that into your pension (thus negating the lower mortgage payments). If your family 'inherit' early, they will need to make double payments, to pay the interest on your property and the interest/rent on their own!! Can't see this getting off the ground.

In earlier days, the majority of people rented all their lives. Ability to pay this rent after retirement age wasn't considered a big social problem, so I don't see why these interest payments should be, particularly as they will be lower in real terms than they were at the start of the mortgage.

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In earlier days, the majority of people rented all their lives. Ability to pay this rent after retirement age wasn't considered a big social problem, so I don't see why these interest payments should be, particularly as they will be lower in real terms than they were at the start of the mortgage.

In earlier days working people pretty much died around the age of 65 anyway.

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In earlier days, the majority of people rented all their lives. Ability to pay this rent after retirement age wasn't considered a big social problem, so I don't see why these interest payments should be, particularly as they will be lower in real terms than they were at the start of the mortgage.

Yes but nobody retired did they, they worked until they dropped dead, that'll be our lot in life, not a lot but it's our life.

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Given 25 years of inflation when i retire paying £900 a month in rent/mortgage may be a good deal.

The point is, rent will rise with inflation, whereas (outside of IR changes which no-one can predict) interest payments will be fixed to the purchase price. Even with low inflation this will make an enormous difference between rent and interest.

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Can you get housing benefit if you rent when you retire if so i dont think you will be able to get it on your own mortgage? Not sure if this is correct or not?

Yes it is true, only if you have less than £16k in savings though and you also have to sell your home to pay for nursing homes so yet another incentive to blow all your money on ipods.

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Guest Bart of Darkness
If they repayment is comparable to paying rent what is the problem?

If you never actually get to own the property, what is the real benefit over renting?

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If you never actually get to own the property, what is the real benefit over renting?

1. That the landlord cant throw you out, which if you have family can be important.

2. That the repayment will be in line with the BOE rates

3. There is a potential for capital gains, also losses, but in 25 years you have to be a BIG bear to think they will be lower than todays prices.

So what are the advantage of renting?

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1. That the landlord cant throw you out, which if you have family can be important.

2. That the repayment will be in line with the BOE rates

3. There is a potential for capital gains, also losses, but in 25 years you have to be a BIG bear to think they will be lower than todays prices.

So what are the advantage of renting?

Couple of benefits off the top of my head:

You can move easily when work dries up in your area, and have no probs with having to wait for 'the right time to sell'... this will be especially important as labour in the EU becomes more mobile (i.e. we start to learn languages other than English in the UK!) High levels of home ownership are one of the primary reasons the UK has so many people with a long commute. If you change jobs you frequently don't move house as it's such a big deal to sell and buy and there are obvious timing issues. Of course there are other things (kids in local schools, etc).

If you are renting a character/period property, the landlord picks up the tab for big bills (roof repairs, new plumbing, electrics, etc).

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Couple of benefits off the top of my head:

You can move easily when work dries up in your area, and have no probs with having to wait for 'the right time to sell'... this will be especially important as labour in the EU becomes more mobile (i.e. we start to learn languages other than English in the UK!) High levels of home ownership are one of the primary reasons the UK has so many people with a long commute. If you change jobs you frequently don't move house as it's such a big deal to sell and buy and there are obvious timing issues. Of course there are other things (kids in local schools, etc).

If you are renting a character/period property, the landlord picks up the tab for big bills (roof repairs, new plumbing, electrics, etc).

Good points. There are Pros and cons of each and if you understand them i think this type of mortgage could be a good choice for certain people.

With this mortgage you get the full benefits and drawbacks of owning the house, provided of course you keep up the repayments.

I suspect most bears on here will hate them with a passion because of the thought they could drive up prices!!

BTW - I dont think the english are going to learn any other languages anytime soon since there are no real driving forces. All the swedes at work speak perfect english, which is important if they want good jobs and want to travel. You must have a good level of english to go to a swedish university. In the UK there is just not the same incentive.

Edited by DONT PANIC !!! DONT PANIC !!!

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If you never actually get to own the property, what is the real benefit over renting?

If you'd taken out an interest-only mortgage 40 years ago (if available!)after only only few years of rents rising with inflation youd be paying less per month than a renter...in fact on an average home youd now be paying about £12 a month versus £800 a month for a renter.......!

and you'd also have made around £200k in equity but still owing the initial £5000 you borrowed in 1966!

This explains why there is nothing wrong in principle with interest-only mortgages....you lot keep slagging off..

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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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