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Interest only - what are your views?

84 replies

NKF · 11/05/2007 14:44

Is it a total disaster (unless you expect to inherit sufficient to pay off loan)? I know many people who've done it and while I admire their courage (and often the places they get to buy), I'm not sure.

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nailpolish · 11/05/2007 14:45

i would say avoid it like the plague

Fimbo · 11/05/2007 14:46

Don't do it.

noddyholder · 11/05/2007 14:48

I think it is v risky

NKF · 11/05/2007 14:48

Well, I'm not seriously thinking of doing it but sometimes I do the sums and think about how much more we could buy and get a bit, you know, wistful.

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Rantum · 11/05/2007 14:49

We are going to remortgage for interest only because we plan to sell the house really soon and are remortgaging simply to pay for a new kitchen and bathroom - and to finish some renovations before we put it on the market - in the meantime we want to keep our monthly outgoings down - we had a pretty good downpayment when we bought the house a couple of years ago and our house price has increased and will increase further with the updated rooms, so we are taking a calculated and minimal financial risk.

nailpolish · 11/05/2007 14:50

i dont think yo u are that much better off, are you? if you include life insurance etc

ive had both mortgages and hardly noticed the difference tbh

NKF · 11/05/2007 14:50

About half the outgoings.

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NKF · 11/05/2007 14:51

I mean if our current mortgage was interest only, the monthly payment would be halved. So if we bought on interest only, we could buy a much bigger place.

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nailpolish · 11/05/2007 14:52

but i f you include insurance...

well anyway i dont think its worth the risk. chances are you wouldnt be able to pay off the loan in the end

QueenofBleach · 11/05/2007 14:52

We have interets only on our flat that we rent out but would not do it if we were going to live there

NKF · 11/05/2007 14:53

Some people I know are taking the view that they'll just downsize later. It's a scary thing and I doubt that we'll do it.
Just another example of different attitudes to risk, I guess.

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anniemac · 11/05/2007 14:55

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NKF · 11/05/2007 14:56

Cash sweeper mortgages?

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noddyholder · 11/05/2007 15:00

It is risky if interst rates keep rising and house prices fall though as negative equity is a real possibility

NoodleStroodle · 11/05/2007 15:04

Wouldn't do it.

anniemac · 11/05/2007 15:04

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anniemac · 11/05/2007 15:05

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NKF · 11/05/2007 15:08

Offset. I know about those. Will do that in the future.

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anniemac · 11/05/2007 15:09

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anniemac · 11/05/2007 15:10

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NKF · 11/05/2007 15:11

I think so. I have a friend who does all that 0% borrowing and puts it into his offset mortgage and has some strategy for paying off his home loan very very quickly.

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JodieG1 · 11/05/2007 15:12

We have interest only. Plan to pay off early anyway but it makes sense to us as the value of the mortgage will be worth less in 20 years than it is now. Ie a thousand pounds was a lot 20 years ago but not so much now.

anniemac · 11/05/2007 15:13

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NKF · 11/05/2007 15:13

Jodie - what's the plan for paying off early?

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NKF · 11/05/2007 15:13

I've done it but not with a mortgage.

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