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 know someone in Sweden who bought a flat with a 50 year mortgage. The rents are high like London rents where he lives so it was actually half the price of renting the same flat, so the way he looked at it was even if he never paid it off it was still cheaper for him.

100 yr mortgages were significantly at fault for the 2008 global Banking crisis.

100% mortgages already happened in the UK. In fact, I know people who had 101% and 105% mortgages as first time buyers. The whole sweetener from the bank was that they effectively gave you money to help furnish your first property. Interest rates were rubbish though in comparison to even 90 and 95% mortgages. This was in 2004ish.

100 year mortgages are not a thing in Japan any more. They had them in the late 80's/ early 90's, so people who borrowed then will still have them, but now the maximum is 35 years for new loans.

I lived in Japan for a while - and, yes, houses depreciate (but the land doesn't) Most houses are prefab built in factories, with a lifespan of about 30-35 years. It's due to earthquakes and continuously improving building regs (around earthquakes) A UK style brick house would be a nightmare with the regular small/ medium shaking. It's why traditional houses were basically wood and paper - fast to rebuild, and less likely to crush you to death.

30 years is the standard here. It makes it very possible to pay off a house during your working life, but you have the security of a fixed rate. If rates drop, you can remortgage for a fee so you are not completely locked in, but the bank can not raise your rate.

I took out a 20 year mortgage with no intention of paying it over 20 years. Itll be done and dusted in 7. Tbh i thought everyone overpaid and got rid of it as soon as possible.

🤣

We were approved for a mortgage whilst living/working in Canada (didn’t take one out in the end) interestingly it was for 25 years, we are in our mid fifties, we wouldn’t be offered that length of mortgage here in the UK.

Be careful you’re ruining the drama and catastrophising with facts.

And that would be THE reason for doing it. Japan introduced multi-generation mortgages back in the 1980s when house/flat prices were booming which then helped to push things OTT. Then partly because of the banks lending too much into it, there was a massive crash and house prices started falling for the next 15 or more years. A freind of ours bought one in 2005 for half the price it was new in 1988, they sold it 3 years ago for the same price they paid for it in 2005, ie 14 years later. I am now waiting for Sunaks book of tricks to push house prices up while interest rates are rising. He did this with his stamp duty trick 2 years ago.

Now the new chancellor is all over TV telling mortgage debtors they won`t be bailed this time.

The new chancellor will be the new new new chancellor by spring, nobody is seriously expecting the Tory’s to hold onto power in even the medium-term, they don’t want to.

Depends on how its done.

If it was done through councils to aid building, for people who otherwise would be on waiting lists for council housing but not open to the general public. It would just be a way to get infrustructure investiment in a different way, but ultimately tenants end up owning and without pushing up public debt.

If it was done in this way, as a way to solve that gap rather than to be for the open market, I can see it being a good idea. But it would need exit options too.

It could be similar to LD type proposals along the lines of rent to buy.

Otherwise I think it would be a disasterous idea which would push up houseprices to insane levels as others have said.

They don’t really give “massive” reductions in monthly payments relative to a 30-year one, and if you want the biggest reduction available in monthly commitments you can already opt for interest-only.

Things often get promoted or sold in this country on the basis that 'thats what they do in x country, whats the problem?'

I cant think of many things that I would see as culturally valuable for this country out of Japan

Im not sure I believe that its big in other countries either,, available perhaps, desirable - no.

Australian mortgages are good because you can literally pay them on a weekly basis, the amount of interest that that saves is astronomical most people are paid fortnightly so if you can alternate with your partner you can shave five years of interest of your loan purely down to the timing of when you get paid. I recommend everybody does this if you’ve got another source of income child benefit, tax credit anything so that you can pay half when you get paid and then a bit more plus the amount due during the month.

Very few people need care.

In terms of the concept, the lenders will love it, think of the compound interest!

Having just paid ours off a few months early, I would absolutely hate that. The minute we had a bit of money to do it, I insisted. The feeling is incredible. (probably wont last, got lots of other debt!)

Most people never need care homes because most of the people the state pay for in care homes have dementia. Loads of people manage with home carers and really only get very basic help.

Pretty much every mortgage in the UK is the same, you can lay early and overpay up to 10% of the outstanding balance each year without penalty.

The mortgages wouldn’t typically allow it they would expect you to pay the expected amount on the date specified. You could get a head of the mortgage by splitting into two payments and making one earlier in the month and one on the date that they want the money but that wouldn’t save you the same amount of compounded interest.

i’m actually restricted to paying a maximum of 499 per month, without penalties some months that’s fine, other months it’s a pain in the arse.

"They had them in the late 80's/ early 90's"

Just before house prices crashed by 90%, or was it 80% I can`t remember.

Bond market doesn`t care who is in power or who is the chancellor.

We have a 35 year mortgage, we took it out in 2012.

In 2002 we had a 110% mortgage from Northern Rock. I think these were only for first time buyers, we borrowed extra and put in a new kitchen and decorated the house, we bought a 2 up 2 down terrace for £40k, the same house just sold for 125k earlier this year.