Does this financially ring true?

[ManyBooksLittleTime]

We bought our house nearly 20 years ago for 245k. Now, 19 years later, we still have 203k left on the mortgage. I know the first years is basically paying interest , but only 42k in 19 years??? We have had good interest rates too.Also, my husband reckons it will go down to 181k by August next year. Please can soneone more astute with finance let me know if these numbers can be right?

Because house price growth has varied enormously across the country and MN is very London/SE centric.

£235k to £410k in 20 years is a growth that is well below average but that could be due to a problem with that house (nothing done to it in 20 years, area blight?).

We had our last house valued in 2002 for a remortgage and it was about £50k and that house will now be worth about £140k and that's in an area that hasn't seen growth anywhere near London/SE levels where a house worth £235k in 2002 is probably be around a million or more these days.

genuinely my mum paid £75k for a 4 bed in a lovely area. Different areas, different prices.

Nothing to do with the house, I know the people who bought it from my parents and are now selling, and they’ve done all the usual updates (new kitchen, bathroom etc). We just live in an area where prices don’t fluctuate hugely. Surely there aren’t many places (outside of London) where a £245k house 20 years ago is now worth £multiple millions?

I bought a house in 2003 for £265k, and it sold for £410k in 2020. Central Scotland.

I'm so sorry op. I wouldn't trust your husband to give you the correct information as either he doesn't understand it himself or he's being deceitful. Either way you need to take control now. Go direct to the mortgage lenders/brokers and get the official statements.

One thing I don't understand is why your monthly repayments are so high. Usually your wages grow in comparison to the amount allowed to be borrowed and you have had twenty years of paying it, ie my mortgage took 40% of our combined wages when we first took it out, after twenty years our repayment was under £100 per month. Even one person on minimum wage could afford that, so how come yours is 2k a month??

Each time you reply op it’s clear you don’t understand the figures and I’m not saying that to put the boot in but you MUST take your statements and go see your provider or an independent financial provider and get some one to break it down for you.

there is no way you’ll be able to pay off £203k in 8 years unless you have some sort of windfall. The numbers do not stack up.

I'm very sorry, OP, but it sounds like each time you remortgaged your husband has taken out rather more money than he let on. As others have said, you need all the statements going right back 19 years to see how much he has taken each time.

He's definitely done something dodgy, especially as your interest rate is only 1%!
We have an interest rate of 4.2% and pay 970 per month on a 200k mortgage.
After 7 years we are down to 170k.

We borrowed £425k in 2016
Left to pay 342k

Payments £1600pm
Interest rate 1.99%

So your payments are high, probably includes overpaymemt?

He must have borrowed a lot each time he re mortgaged and was on interest only for quite some years!

I'd ask to see all the statements, and what did he do with the cash he borrowed????

It is feasible, but the calculator shows £203,000 at 5.11% over 8 years as being £2,581 per month, which is a large amount.

If OP's husband is telling her they can pay it off at a lower amount in the same period, then he's either being mislead or he's misleading.

OP - The other thing I didn't mention is that if it transpires you've had bad deals because of your husband's (or your) lack of understanding, you may have a case for being mis-sold a product.

I remember years ago, when I was young and naïve, a mortgage broker (not independent, again in hindsight) convinced me and my ex to get an interest only mortgage with a separate endowment policy to cover the capital element.

It was all the rage back in the mid-90's, and they'd sold it to us on the basis that it was pretty much guaranteed that our endowment policy would end up way more than the capital element, so we'd actually be much better off.

A quick google will tell you how that ended up...

I never sought any compensation from the mis-selling because a) we only had the mortgage a couple of years and won't really have been massively financially disadvantaged; and b) it would probably mean having to contact me ex as we'd have to share any compensation - not appealing!

Why is everyone trying to make out the husband is evil here?

It happens in lots of relationships even though we dont like to admit it. DH assumes the role of breadwinner and controller of funds and DW enjoys life blissfully unaware or interested in how the money is used.

I have read this thread and the OP comes across exactly this way. She has little knowledge of the past 20yrs finances. She has taken little interest in them and talks about 'extras' and 'credit card debt' as though they are of little importance. I am not sure she can account for any of the extra spending over the last 20yrs. It could be just getting by. I had a work collegue who found his wife £40k in debt and she hadnt purchased a single 'luxury item'. It was all family meals out, socializing and kids stuff.

So you have a DH making sure everything ticks over. Making decisions that effect the whole family and at a guess very open to discussing them with the OP who isnt really interested. Are you really telling me in 20yrs she hasnt had opportunities to raise this question multiple times.

If the DH is trying to clear £1900 per month off the mortgage then congratulations. He is doing something to sort the problem out. My guess is he is trying his best to let the OP know that things cant carry on the way they are and they probably need to reign it in a bit, especially seeing what interest rates are doing.

I'd be interested to know who/ what this company advising you and apparently managing your mortgage applications is? Is it some self-proclaimed financial advisor mate of your husband's? Is it someone who's making a percentage of every new mortgage contract you sign — so will steer your husband to a product that suits the advisor rather than you, the clients?

Back in the 1980s a friend introduced me to someone they thought was a qualified accountant do some work for me. He subsequently 'advised' me on my mortgage. It was only five years later, when I remortgaged, that I discovered that he wasn't a qualified accountant, I was paying a ridiculously high rate and that my 'accountant'/ advisor had had an £2k introduction fee from my mortgage provider and was getting £50 from my mortgage payment each month — and would have done for the whole 25 years if I hadn't remortgaged. That a**ehole made £5k from me. Is that where all your money's going too?

Because he’s lying to her. Clearly.

I agree that she’s went through live unawares and let him deal with it, it’s mind boggling the extreme of it , I grant you, but he’s lying.

now he may have done it for good reason ie they have been living well above their means, but he has likely borrowed 100-140 grand extra.

Annie "Because he’s lying to her. Clearly."

but if OP is named on the mortgage, surely she will have had to read and sign paperwork each time a change was made?

Your husband is right that borrowing £245k at 4% interest will cost you about £388k in total on a 25 year mortgage. Your mortgage statement wouldn't say £388k, it will state the amount owed without interest ie £245k at the start, the outstanding balance excluding interest (ie how much you would have to pay the bank if you settled the mortgage in full in one payment) thereafter.

At the beginning of the term, most of your monthly payments are paying the interest on £245k so only a small amount is paid off. The next year, you are paying interest on, say £240k, so the interest payments are a bit less, and more gets paid off. The MSE calculator linked below shows you how the it works in a graph. You should owe close to £100k with 8 years to go.

www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

Two things don't add up about your DH's story:

1. You should owe less than £200k now, even with additional borrowing of 2 x £7k
2. If you have 8 years left on your 25 year term, and pay £1.9k per month, you will only pay £182k in total in that time. That isn't enough to cover the outstanding £203k, let alone the £203k plus interest. The bank wouldn't allow there to be an outstanding balance at the end of the term. Your DH must have extended the term.

I don't think just extending the term fully explains why you still owe so much after 20 years, unless he extended it by a long time. Either he has borrowed more than the 2 x £7k or he has taken a mortgage holiday at some point or changed to interest only.

Where has it been proven that the husband has lied to the OP? She has little understanding of whats going on, is very vague discussing actual figures and at no point has she stated that he has refused to tell her any details over the 20yrs.

Is that lying?

Not all places go up uniformly

I had a similar priced property in 2004 on the outskirts of London which I sold last year. No where near the £1million or £850,000 mark
And we didn’t overpay in the beginning. It was considered a bit of a bargain.

You don't have to get him to explain anything. You can simply look at all the mortgage statements. I would guess he has remortgaged several times without you knowing and used the money for stuff he wishes to hide from you.

did You not read all her posts? His explanation of why they have so much left is a clear lie. The man has borrowed between 100-140 grand extra and probably moved to interest only as well. There is no other way they still owe so much

Mortgage Advisors no longer make a % of the mortgage as a payment. and have done so for some time. They receive payment from the lender which is for the work invovled in arranging it.
This does not get paid by the client, and does not increased the rate charged.

your husband writing things down means nothing

He's not necessarily deceitful

But from what you said earlier, he does not understand what compound interest is.

Do either of you understand this concept? Because to be fair most people don't, and then you get these shocks.

Long term borrowing is hugely costly, basically

We've paid off about £60k of our similar sized mortgage, without overpaying, in 10 years, so I would expect in 20 years you would have paid off well over £100k. But you've only paid £40k...

@ManyBooksLittleTime

If you are "overpaying" and hope to pay off your £200000 odd in 8 years you must be paying in the region of £25000+ per year or £2000+ per month.

Does that seem feasible? Is it on your bank statements as a regular outgoing?

So how much have you actually borrowed in total?

what is the total mortgage?

Then you can work out how much you've actually paid off

Given that the OP is rather hazy on the details I think it's only fair to wait and see what the mortgage statements say before condeming the husband as having some kind of secret addiction