Reform to put millions in interest-only trap

[NoddY]

The real irony is interest only mortgages could be quite flexible - many of them allowed penalty free capital 'overpayments' during the term; most useful for people with feast and famine incomes.

[AtW]

Every 3 to 5 years is the average? God knows what has happened to all the people over 60 on my street who have been here 30+ years and there are families all over the houses as soon as they 'move on'!

Old people were less mobile.

Besides, maybe its 3 to 5 years average in a certain price bracket, I cannot imagine paying stamp duty at 3% + every 3 to 5 years.

Why not if house prices always go up by 10-20% a year?

[AtW]

I agree with you (I was just pointing out the statistics) except for the point quoted (and with a caveat) - the only reason house prices haven't crashed round our way is lack of supply

Lack of supply is because people don't get evicted by banks taking over houses as they can't afford repayment - this was fixed due to low interest rates (and banks being forced to match them in tracker mortgages).

I look at what you can buy in Florida for $300k and what you can buy in Brum for £200k and it's big ******* difference!

[MPwannadecentincome]

Old people were less mobile.



Why not if house prices always go up by 10-20% a year?

WTF then 3% stamp duty becomes 5% stamp duty and where does the money to pay the stamp duty come from? Either income or increasing the mortgage, so if you keep moving and having to increase the mortgage each time then interest only is a fool's game.

[AtW]

WTF then 3% stamp duty becomes 5% stamp duty and where does the money to pay the stamp duty come from? Either income or increasing the mortgage, so if you keep moving and having to increase the mortgage each time then interest only is a fool's game.

Look, if you move every 5 years than 3% stamp duty is 0.6% per year, not a big issue when interest rates were 5%+ _AND_ property prices were going up and up and up.

[MPwannadecentincome]

Look, if you move every 5 years than 3% stamp duty is 0.6% per year, not a big issue when interest rates were 5%+ _AND_ property prices were going up and up and up.

nope I don't get it.

Property prices go up and up. So you need more income to move as the cost of moving is non-trivial. Stamp duty at 5% is not insignificant.