Oh Dear: Interest only mortgages

**mudskipper** · 15 March 2012, 08:03

This was the age of endowment.

**ThomasSoerensen** · 15 March 2012, 08:05

Fools and their money.

**BrilloPad** · 15 March 2012, 08:06

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

**BlasterBates** · 15 March 2012, 08:12

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.

**ThomasSoerensen** · 15 March 2012, 08:17

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

**BrilloPad** · 15 March 2012, 08:18

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.

**eek** · 15 March 2012, 08:45

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

**ThomasSoerensen** · 15 March 2012, 08:48

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

**eek** · 15 March 2012, 08:59

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.

Oh Dear: Interest only mortgages