Soldato
You would hope that the extra barriers they have put up for landlords recently will prevent the cash rich hoovering up all the cheap houses in a crash but I doubt it.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
I wouldn't be sure, only those with cash to buy outright will benefit the others will be saddled with the higher cost of the debt meaning even modest falls in the house prices still leaves them even more unaffordable which is the reason for the falls in the first place. So far this is very different to 2008 anyway.
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Soldato
Its all very well expecting FTBs to jump into a market with reducing house prices.
However historically that doesn't happen since lending criteria tends to be tightened at the same time.
2008 being the last example. House prices dropped 20-30% so most FTBs would jump in, but it was practically impossible to get a mortgage.
It was worse than normal due to the system shock but when banks fear reducing prices those who cant put down 20% or so aren't considered a good risk.
The only ones who really benefit in a housing "crash" are those who can upsize (very low LTV typically) and those who can buy cash.
However historically that doesn't happen since lending criteria tends to be tightened at the same time.
2008 being the last example. House prices dropped 20-30% so most FTBs would jump in, but it was practically impossible to get a mortgage.
It was worse than normal due to the system shock but when banks fear reducing prices those who cant put down 20% or so aren't considered a good risk.
The only ones who really benefit in a housing "crash" are those who can upsize (very low LTV typically) and those who can buy cash.
Caporegime
The rich gets richer.
Warren Buffet's advice in a time of financial crisis is to have lots of liquidity so that when you see a bargain, jump at it.
Soldato
Caporegime
*magics liquidity out of thin air*
Easier said than done, I think.
Well...his audience in the Q&A are likely all rich people and likely millionaires.
Soldato
- Joined
- 30 Sep 2005
- Posts
- 16,712
Yep, they suck all the wealth out of the economy.
Government really need to (they never will) get on this wealth redistribution.
More and more people are being sucked into the "class" below. Yet the super rich just get richer, exploiting the misfortune of the majority.
There will be so many in the middle and below class that promoting policies to benefit the rich will (hopefully) become more and more unpopular.
I know you get the bizarre phenomenon that poor people vote for rich benefiting parties due to expecting to be rich one day. And other reasons.. But hopefully this ebbs away now.
More and more people are being sucked into the "class" below. Yet the super rich just get richer, exploiting the misfortune of the majority.
There will be so many in the middle and below class that promoting policies to benefit the rich will (hopefully) become more and more unpopular.
I know you get the bizarre phenomenon that poor people vote for rich benefiting parties due to expecting to be rich one day. And other reasons.. But hopefully this ebbs away now.
Question:
We are 3 years into a 5 year fix. For about the last 15+ months, I've upped our monthly payment overpaying by about 25% a month. Could I go to my lender and ask them to now reduce my monthly payments by 25% less than the original amount, so I can benefit from placing the extra monthly saved money into a high interest savings account? So basically under pay for 15 months so that in 15 months I'm still on track for the same amount paid back but I've been able to use money in savings?
We are 3 years into a 5 year fix. For about the last 15+ months, I've upped our monthly payment overpaying by about 25% a month. Could I go to my lender and ask them to now reduce my monthly payments by 25% less than the original amount, so I can benefit from placing the extra monthly saved money into a high interest savings account? So basically under pay for 15 months so that in 15 months I'm still on track for the same amount paid back but I've been able to use money in savings?
Soldato
Depends on your lender and terms
Nationwide for example puts the overpayment into a reserve but their default is to reduce your payments for the future.
In theory with nationwide you can request eg a payment holiday, but its not a right to get one.
I think it varies by lender/product - Nationwide allow something similar to this IIRC. But they will "reinstate" the interest you should have paid or something???
Payment holidays definitely ding credit records as well AFAIK. People got caught out jumping on the COVID payment holiday bandwagon at renewal.
Caporegime
You have to be careful as if its a substantial amount you'll have to pay tax once over the personal savings allowance which will eat away at the interest you earn. You can use your ISA allowance to avoid some tax.
Overpaying your mortgage doesn't have tax implications.
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Yep they definitely do, same thing goes with any lender really. I asked about this when Paypal was offering payment holidays and said it would affect your credit score and quite severely i might add.
Soldato
Yeah I wouldn't as it flags you as as risk of someone who wants to pay less, and they'll want to know why, would prefer to reserve that for need only.
You're better off stopping the overpayments and using that instead.
You're better off stopping the overpayments and using that instead.
Associate
- Joined
- 12 Jan 2003
- Posts
- 2,027
Just call Nationwide.
Overpayments are typically applied by reducing future monthly payments so your standard monthly figure should already be less than it was.
Eating into your overpayment value is not a payment holiday as you would still be making payments and covering the interest plus a reduced capital value.
Overpayments are typically applied by reducing future monthly payments so your standard monthly figure should already be less than it was.
Eating into your overpayment value is not a payment holiday as you would still be making payments and covering the interest plus a reduced capital value.
Soldato
Payment holiday doesn't add extra time to the term length right?
You just have to make sure you pay it before your term length ends?
You just have to make sure you pay it before your term length ends?
Soldato
