Saturday, May 23, 2020

Last throw of the dice

Moneywise: Interest rates could go sub-zero: how would this affect mortgages and savings?

This effectively would be paying off peoples mortgages for free.
I'm a bit surprised that there hasn't already been a revolt amongst savers. I have lost count of the number letters I have received saying my savings rates have been reduced to figures like 0.05%

Posted by tenyearstogetmymoneyback @ 03:45 PM (424 views)
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2 Comments

1. deepak said...

I was in Germany over 10 years ago, and they had negative mortgages. This was also true in other European countries. You paid 99.8% back for what you borrowed.
But their is a catch and a very big one, You will have to pay the high prices of today's market so you are paying for €500,000 for a 2 bed flat in a out skirts of a town.

You carry a lot of capital risk.What you will save interest, you can loose more in any future recession

Sunday, May 24, 2020 03:08PM Report Comment
 

2. tenyearstogetmymoneyback said...

I have just been reading another article about this and they point out another catch - Fees. Nine years ago I encountered that. After sitting through a 90 minute application interview at YBS, they asked "so do you want to apply for this mortgage ? The application fee is £1300". At that point I hadn't even had a survey done on the property, which was back on the market due to a crack in a wall (which, fingers crossed, hasn't changed in thirty years).

I went with a Natwest Offset Mortgage. Same long application interview but no fees and you can pay it off as fast as you like.

Monday, May 25, 2020 07:50AM Report Comment
 

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