Originally posted by ladymuck
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40 year fixed rate mortgage
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What an absolutely horrible product. A 25 year at a normal rate will have a lower monthly repayment!!! Why would you choose to pay higher per month for 15 more years? Insane.Comment
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Originally posted by jayn200 View PostWhat an absolutely horrible product. A 25 year at a normal rate will have a lower monthly repayment!!! Why would you choose to pay higher per month for 15 more years? Insane.Comment
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Originally posted by AtW View Post
It's a great product if BoE rates go up to 5% like in the normal times, but that ain't happening.
When they slashed rates after the 2008 financial crisis, they said it was a temporary measure.
Is there any point in having savings any more?Scoots still says that Apr 2020 didn't mark the start of a new stock bull market.Comment
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It's a great product for people on normal wages who can't get a 20-25 year loan because of the unnatural propping up of the housing market that keeps prices inflated and repayments unaffordable (by either practical or lender standards, which are often not the same thing).
I would expect any savvy borrower to use this type of loan to get started and then switch once they've built up equity. It would indeed be madness to keep the product for its 40 year life time.Comment
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Originally posted by ladymuck View PostIt's a great product for people on normal wages who can't get a 20-25 year loan because of the unnatural propping up of the housing market that keeps prices inflated and repayments unaffordable (by either practical or lender standards, which are often not the same thing).
I would expect any savvy borrower to use this type of loan to get started and then switch once they've built up equity. It would indeed be madness to keep the product for its 40 year life time.
Can you easily "switch" (get out of) this product? That's different than being "portable" (moving the mortgage to be used on a different property). I suspect there's extreme exit fees with this mortgage product (most fixed rates have punitive exit clauses).
I'm still at a loss why it's a great product, the 5.5% I have no issues with, it's a bridge if it has a short fixed term. Most high-street lenders will give better terms for 95% loans now with the gov's underwriting. It comes across as a Wonga loan for prospective first time buyers (go and do a simple calculation for this product).Comment
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I stand corrected on the exit fees, apparently there aren't any, so it's essentially fixed-for-term-if-you-want - which could be a useful bridge indeed. Not sure I fully understand their business model.Comment
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Originally posted by ladymuck View PostNot a bad option in some ways - higher interest but the option to fix for a long term with no penalties for early repayment is the sort of product missing from the UK market
https://www.theguardian.com/money/20...o-deposit-loan
EDIT: and it's portable too
Which means that swapping mortgages every x years as you move down into the next loan to equity band makes far more sense than this deal does.merely at clientco for the entertainmentComment
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Originally posted by TheGreenBastard View Post
What's unnatural about it? Things change, this is the new normal - this isn't UK specific.
Can you easily "switch" (get out of) this product? That's different than being "portable" (moving the mortgage to be used on a different property). I suspect there's extreme exit fees with this mortgage product (most fixed rates have punitive exit clauses).
I'm still at a loss why it's a great product, the 5.5% I have no issues with, it's a bridge if it has a short fixed term. Most high-street lenders will give better terms for 95% loans now with the gov's underwriting. It comes across as a Wonga loan for prospective first time buyers (go and do a simple calculation for this product).
Most high street lenders will not give terms longer than 25 years which, for some people, puts the mortgage in the unaffordable category. I guess your attitude is that those people shouldn't have access to a longer term loan and be allowed to buy a home.Comment
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