Anyone know mortgages?

[PyroUK]

Not sure when it's coming in to play but there is the possibility that you won't be offered interest only which is usually the cheaper at initial set up.

Thanks to the yanks and the **** poor mortgage decisions which landed us in this marvellous recession, banks will have to confirm you can absolutely clear the mortgage at the end of term on interest only otherwise they shouldn't sell it to you.

Not a bad thing necessarily but something to be aware of as you may only get repayment mortgages offered which are higher monthly and set up fees.

[sumimasen]

Would it be possible to leverage your pension against the interest-only repayment? Could save some bucks as it's tax-free?

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[PyroUK]

Possibly, I guess being the money grabbing bar stewards that they are, they wouldn't give two turds if you were starving and freezing because they took your pension. Haha

But yeah essentially I guess you would have to show that either you earned enough to clear it or had saving and investments etc that would clear the debt after the 25 years eg.

Bit of a nightmare for me at the moment as I want to get off the interest only I'm on but I don't earn enough to cover the repayment options

[sumimasen]

In theory if I upped my pension saving by the difference between repayment and interest-only, it would get cheaper as its pre-tax?

I may have missed a detail or two here...

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[PyroUK]

In fairness I'm not really sure how pensions work other than initially paying for them but I think that it's taxed when you get it. So as long as your pension comes in under your tax code you wouldn't pay tax on the income at that point. But if you were to leverage it you would need a lump sum payment from it, if yours allows that, which would then likely be taxed, possibly heavily.

Originally Posted by Specialone

Mine is lower than that I think, 5 year fixed too.

Likewise.

Oddly the 5 year fix was lower priced than the 2 year fix.

Originally Posted by PyroUK

Bit of a nightmare for me at the moment as I want to get off the interest only I'm on but I don't earn enough to cover the repayment options

Interest only but overpay by 10% to bring the capital down? Or simply save what you can and pay a lump at the end of the locked in period?

[PyroUK]

Originally Posted by Spank86

Interest only but overpay by 10% to bring the capital down? Or simply save what you can and pay a lump at the end of the locked in period?

Sadly I might not be able to get another interest only now, which means sticking with what I have currently.

Originally Posted by Spank86

Likewise.

Oddly the 5 year fix was lower priced than the 2 year fix.

The one I was offered was slightly worse than the two year deal ~0.1%, that's not a bad deal then.