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Oh Dear: Interest only mortgages

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    Oh Dear: Interest only mortgages

    whose clever idea was this then...

    Homeowners in their 50s 'facing interest-only mortgage timebomb' after taking out loans during boom years | Mail Online

    why do people gamble with anything other than a repayment mortgage ?

    Milan.

    #2
    This was the age of endowment.

    Comment


      #3
      Fools and their money.
      "Condoms should come with a free pack of earplugs."

      Comment


        #4
        After all the house price inflation their mortgage is quite low as a percentage of property price so they can just downsize a bit.

        Comment


          #5
          Oh yes that's right they're endowment mortgages, but essentially the endowment policies pay out a fraction of what they were supposed to. This goes back to the early 1990's. The other thing is that although these mortgages were sold as a package where effectively you invest in a life insurance policy, which then matures at the end of the mortgage agreement, they are separate, so I can imagine that many homeowners just cashed it in or gave up paying in regularly. On the positive side most of these policies are from the 1990's before the housing boom took off so at least a lot of these homeowners should have positive equity in their house. They can probably downsize.
          I'm alright Jack

          Comment


            #6
            It seems the Government want in on the interest only mortgages too.

            Small businesses to benefit from Government scheme - UK Politics - UK - The Independent

            FFS 100 year or perpetual gilts.

            Idiots
            "Condoms should come with a free pack of earplugs."

            Comment


              #7
              Originally posted by ThomasSoerensen View Post
              It seems the Government want in on the interest only mortgages too.

              Small businesses to benefit from Government scheme - UK Politics - UK - The Independent

              FFS 100 year or perpetual gilts.

              Idiots
              No one in their right might will buy them - but there are some very very stupid investors out there.

              Comment


                #8
                Originally posted by BrilloPad View Post
                No one in their right might will buy them - but there are some very very stupid investors out there.
                If they stop issuing 30 year gilts many pension funds will have no choice but to buy them
                merely at clientco for the entertainment

                Comment


                  #9
                  Originally posted by eek View Post
                  If they stop issuing 30 year gilts many pension funds will have no choice but to buy them
                  They can buy something entirely different them. US debt perhaps
                  "Condoms should come with a free pack of earplugs."

                  Comment


                    #10
                    Originally posted by ThomasSoerensen View Post
                    They can buy something entirely different them. US debt perhaps
                    If its denominated in Sterling yes they can. If its not no they can't because there would be an added currency risk.
                    merely at clientco for the entertainment

                    Comment

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