UK Property "Tipping Point"

[Platypus]

Low interest rates will be the saviour of the current situation

Cobblers! Banks will simply increase margins. Rates to end customers will scarcely fall. iscussed on R4 this morning. Banks will claim that by keeping money harder to come by they are being responsible.

Anecdote: Barclays recently offered me the chance to cash my existing loan (rate: 7.9%) and get a new one (rate: 14.9%). Base rate was higher at the time the loan was taken than now.

[Bagpuss]

I remember getting a car loan in 1990 and the rate was around that. It seemed quite reasonable at the time, but that was when money wasn't cheap and easy and debt was considered a bad thing.

Lowering interest rates to 3.5% is all that is needed, the pound could then collapse, our imports go through the roof and we could all languish on the dole.
CyberTory

[SallyAnne]

Please don't take this the wrong way, but you don't own the house.

Unlike those who repay the mortgage and thereby take ownership a slice of the house as they keep making repayments, you are only servicing the capital borrowed.

I'd always go for repayment method.

Noone owns their house until it's fully paid off.

Interest only was the most sensible option for us - we wanted the flexibility of paying off "sometimes loads" and "sometimes none" depending on whether we are in gigs or not.

And our high interest savings account is offset against the mortgage interest, so as we're building up our pot to pay the house off (should take another 4 or 5 years) we pay less and less interest each month.

In 5 years we'll be left with £280k cash in our savings account, and a monthly mortgage amount of 0. Then it'll be our choice to clear the balance or keep that money at our disposal.

[ace00]

Noone owns their house until it's fully paid off.

To be clear - you do own the house. You also own a debt secured against that house. You don't repay the debt, the house is removed from your posession.