pension options

[SimonMac]

Question, can you buy a house for £250,000 ?

Milan.

I bought mine for £47,000 but then again I bought mine before the boom

[sasguru]

What is this "mortgage" thing of which you lot speak?

[bobspud]

My dad just embarrassed the hell out of me by showing me what is in his accounts. He never earned more than 20k in his life has been retired for 15 years. He only had a 15k per annum pension with every thing taken into account. He took my mother all over the world and has a bought a new car every few years (won't be buying another one though he's getting too old to get insured.) He's fscking loaded !!!! Mum just passed away and I tried to pay for her funeral. He said don't be silly and paid cash! His wise words are you need to take into account the fact that you do less as you get older. So if you think of it as the right hand side of a bell curve. Sort out loads of cash for between 50 and 70 then look to run yourself down from that point on.. there is little point living life to a mediocre standard now, only to leave 100k in the bank just in time to need a nursing home...

[MarillionFan]

Your sums still don't add up, those 1.98% + Base are only for 2-3 years, but your plan relies on using 5 years bonds etc? Also if you look at the LTV applicable on those rates they are still only around 65-70% so you would need a perfect storm of ideal situations to make this work, which in reality will not likely happen, so although yes it can be done as you say, odds are I wouldn't feel safe relying on so many uncertainness. If you can get very good returns why not use invest your £150k to begin with, why add the additional complexities of buying a property too. Why not get the mortgage at 60% LTV and then rent out the property making a solid 4% return on the rental income after paying the mortgage and getting a £250,000 house out of it for £150,000 after the rent pays the mortgage

My sums add up. Now bugger off permie boy.

[MarillionFan]

I bought mine for £47,000 but then again I bought mine before the boom

If you bought in the North, then it's probably only worth £35k now.

[SimonMac]

If you bought in the North, then it's probably only worth £35k now.

Last valuation was £105k, renting it out for £625 a month on a mortgage of £149 a month.

Now where is that smiley

[SimonMac]

Now bugger off permie boy.

How rude!

[MarillionFan]

Last valuation was £105k, renting it out for £625 a month on a mortgage of £149 a month.

Now where is that smiley

See, now that's a good return at 7%. So on my example, if you had a mortgage rate on your principal home of 1% then taking out the equity and buying another one for £105k would make sense. In fact, why not buy two at an LTV of 50% and take out a BTL mortgage at 5-6% for the other half.

Anyway that's my plan and that's why I've used my equity to go and buy some more BTL property.

Of course, if interest rates shoot up and there's a housing crash then I'm fecked. But that's the risk.

[SimonMac]

See, now that's a good return at 7%. So on my example, if you had a mortgage rate on your principal home of 1% then taking out the equity and buying another one for £105k would make sense. In fact, why not buy two at an LTV of 50% and take out a BTL mortgage at 5-6% for the other half.

Anyway that's my plan and that's why I've used my equity to go and buy some more BTL property.

Of course, if interest rates shoot up and there's a housing crash then I'm fecked. But that's the risk.

I want to know who you bank with that will let you have two or three risky mortgages on the go at the same time, hang on I can probably guess its Northern Rock

[MarillionFan]

I want to know who you bank with that will let you have two or three risky mortgages on the go at the same time, hang on I can probably guess its Northern Rock

Shhhhh! You don't tell your principle lender.