I've never done it but if you have good LTV and the right mortgage rate AND you overpay to cover the loan value for say 3 years it is a very cheap source of money. Adding it to a mortgage and paying it off over the length of the mortgage is not sensible unless you're buying a Mac F1 for 1m and selling it for 10m
Car Finance via Mortgage?
- Thread starter NeilMick
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I've never done it but if you have good LTV and the right mortgage rate AND you overpay to cover the loan value for say 3 years it is a very cheap source of money. Adding it to a mortgage and paying it off over the length of the mortgage is not sensible unless you're buying a Mac F1 for 1m and selling it for 10m
It's only debt. And a cheap form of debt at that.
Obviously it's not the 'best' approach, financially speaking, as you'd be better off investing the money for the 18-24 months and earning interest, than spending interest on the mortgage.
But if you really want to get it now, then it's probably going to be better than getting a personal loan for the vehicle, provided you don't incur any silly fees for the mortgage.
I'm not really sure why you want interest only rather than repayment though?
Obviously it's not the 'best' approach, financially speaking, as you'd be better off investing the money for the 18-24 months and earning interest, than spending interest on the mortgage.
But if you really want to get it now, then it's probably going to be better than getting a personal loan for the vehicle, provided you don't incur any silly fees for the mortgage.
I'm not really sure why you want interest only rather than repayment though?
V8 Vantage for £25 a month.
The maths couldn't possibly be wrong.
Okay fair enough you've taken into account a £15k depreciation. But you need to add it onto the £25 a month number.
If it still remains worth it, then go for it.
Couldn't you say the same for PCP plans which require a large final payment.
The maths couldn't possibly be wrong.
Okay fair enough you've taken into account a £15k depreciation. But you need to add it onto the £25 a month number.
If it still remains worth it, then go for it.
Couldn't you say the same for PCP plans which require a large final payment.
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The £25 is simply the interest on the finance, purely theory using the best rate I could find. If I go for one with no penalties for early repayment I'm sure it'll work out at a bit more, but not a lot.
I know there is the depreciation, but I don't think that is likely to eat up 15k in 2 years on a car that has already lost the majority of it's value.
I know there is the depreciation, but I don't think that is likely to eat up 15k in 2 years on a car that has already lost the majority of it's value.
I'll still have 1k+ a month disposable income for repairs and running costs. There's nothing that major that tends to go wrong with them other than the rear lights which you can replace for about £700 and a clutch (even though they should last at least 25k miles which is £1700.
Very little as pretty as an Aston that is true, it's why they sell them in the main I think. If you enjoy driving over cruising around in an Aston however, I think you might be regretting some of it's missing dynamics (i've not idea what you've been used to) after a bit, unless you are coming from a history of something less special, then it will be great. However if you just want and Aston, because you've always wanted an Aston, go for it, they are far from a bad car.
I guess so, but that's just a function of how they work AFAIK.
I'm not sure why you'd pick Interest Only in this instance over repayment, that was all. Whether it's PCP/mortgage/personal loan.
Well the OPs mortgage interest rate is likely to be 3% or less. At that level it doesn't really matter much for £20k.
Over 2 years in interest you are paying (roughly)
Interest Only: (£20k * 3%) * 2 = £1.2k.
Repayment: (£20k/2 * 3%) * 2 = £0.6k.
So it is only a £600 difference. When we are talking about a £20k loan over 2 years that really isn't that much of a difference.
Especially as the extra money you have in the mean time you can spend on other things or even put in a Santander 123 Account and earn 3% minus tax. That makes the £600 difference lower still.
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Interest only works fine so long as there is a plan in place to actually clear the balance at an appropriate time - it's when people think they're getting free money to be covered by a mythical increase in property value that problems . That's obviously not the case here
Even then. As long as your house price doesn't go down in price and you are willing to sell it if need be after 25 years, you are fine.
Obviously for your home that can be a bit of a problem, but a car the OP can always get rid of it.
The OP has already accepted the car will depreciate and is willing to take that hit.
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I agree it's not much difference, just struggling to see the benefit as a consequence.
I would've thought it would be easier to just pay it off than to start playing off the interest rates... and if that was what you wanted to do then the car would be neither here nor there.
Anyway, as you've said it's a fairly moot point. Just seemed odd to me to go for Interest Only, and it seemed potentially that it was done to minimise the monthly payments and thus how bad it sounded, which wouldn't be the best of reasons.