Get ready for 100 year mortgages

[shutthe]

Friend has come back from Japan where 100 year mortgages are pretty normal. Since finding out about this, a Dutch friend says loads of his friends have them and they were normal in the Netherlands.

Before he was kicked out, Boris was looking at introducing them.

Would you take one out? They work by giving massive reductions in monthly payments, but you never own your property, and you leave your kids either debt or have instructions to sell on probate on open market.

I can't see how the UK won't adopt this type of lending given so many developed nations with housing crisis ( Japan, Netherlands) have too.

I’d you never own the property, what’s the point?

It’s glorified renting really.

Sounds great.... for the banks. Imagine taking a bet that you and your progeny won't endure any economic hardship over 100 years.

Just imagine you took one of these mortgages out in 1922....

Agree it’s glorified rent and moreover is almost a form of serfdom akin to back in the olden days with Barons (banks) and peasants. I would much rather rent than be tied to a property with that term outstanding 😅.

I agree that 100 yr mortgages are a bad idea, but the difference with renting is that even if you don't reach the end of the mortgage term, if your house appreciates in value you can pay off the mortgage early and use the equity. Renting doesn't give you that.

Whats the point its not really a mortage is it - just long term renting with some added benefits like you can update the kitchen and bathroom do extensions without needing permission

Giving that burden to my kids? No way.

I wouldn’t be able to pay my mortgage on current state pension, I need to downsize or pay off by then.

It will just divide the country more. Expensive places will keep going up and up in price, as the money will still be there to be loaned.
They need to restrict lending to force a stabilization, if not decrease in the crazy priced places, and let the reasonably priced places potter along.
160k/140k for a 3 bed semi or terrace, with parking and good or outstanding schools isn't a problem, imo. That's round me.

I’d take one over the ridiculous insecurity of renting, which I’ve endured for 15 years.

100 year mortgages would make house prices explode upwards... terrible idea

@shutthe

normal in Switzerland too

Wondering how that would work in conjunction with social care costs. Would a property with a 100 year mortgage have to be sold when the orignal mortgage-holder went into residential care? The equity used in paying for care? Or would the property remain mortaged and transfer to the children, in which case, how are care needs funded?

Also, how does the mortgage transfer when there's more than one child in the next generation down?

Mind-boggling!

No it’s a ridiculous idea!

I think the point is you'd pay significantly less per month.

Nooooo, really, woah, my mind is blown …. 🙄

Not sure which part of the Netherlands your friend is in - but it certainly wasn’t normal where I was. I took out a standard 20 year repayment mortgage.

That's how they'd be sold - but the reality is that it would mean house prices go up, as if you could afford a 500k mortgage now over 20 years, paying the same would mean you'd be able to borrow 2500k - ie, £2.5 million. All those extra people able to borrow that much? Well, it means they wouldn't recoil at a flat priced at two and a half million.

So what happens when you retire? Pensions in this country are largely based on the idea no one will have a mortgage when they retire and those without much money but renting can get benefits.

This with bells on. Plus we already have internet only mortgages so why would we need this?

Internet is interest doh

No way from me too

Also with renting there are restrictions on what you can do and the landlord can terminate the tenancy

Not standard in Japan, where houses actually depreciate since being built.

Your right!

I was talking to him about it today via WhatsApp , our wires got crossed, he said its 100% mortgages, not 100 year mortgages are what most of his friends have!!!

But he did say he has heard of them in some countries in EU.

I must admit I find it really strange how different the mortgage markets are in other countries, but given interest rate rises VS prices what options have we got in the UK?

Mortgages over 50 , 60 , 100 years is going to be the only financial option for millions of people in a year or two or sell up and pay huge rent.

For those saying what's the difference between renting , well a 25 year old would pay a quarter of the monthly cost to buy a flat than they would now which assuming isn't their forever home, they get to benefit of price increases when they sell in a few years and step up to their next home. That's got to be better than renting and paying thousands in dead money??

@Worriedaboutethics Never knew Swiss had this.

Great idea.

We're just coming to the end of an economic cycle where house prices have risen too much and the deeply indebted who took on large mortgages to enable them to afford the price increases are about to be eviserated by rising rates.

The solution is surely to ramp house prices even further by reducing mortgage payments and kick the problem as far as possible into the long grass.

Then when the whole situation gets out of control again we can move to the 1000 year mortgage and after that the 10,000 year mortgage. We can add another 0 every time the system looks like it is going to blow up. We might even get to some sort of hyper inflation scenario where we can add a 0 every 10 minutes. All the time I can revel in the glory of paying my bank manager more and more interest so they can get richer and richer while I'm reduced to servitude and living in a house the size of a shoebox that costs £40 million.

Maybe after a million years we will have evolved into some sort of giant sponge that lives in the sea and has no need of mortgages, rendering the whole exercise pointless.