General Chat

I was offered an interest only mortgage in the late 90s in order to buy my council flat.
The repayments would have been similar to the rent i was paying, but in order to have the money to pay off the capital I would have needed some other form of regular savings, or be prepared to sell the flat at the end of the term & have no home.
In the end I didn´t buy it which was a shame because by the time I retired it was worth nearly 4 times the amount of the loan & I was planning to move when I retired anyway.
Missed the boat again :-| :-| :-|
Now, 10 years after retiring, I´m still having to rent.
Ah well.

I think one of the problems nowaday compared with years gone by is that a mortgage was for for a fixed term of 25 years for new property and 20 years for older property or less years if preferred.
When the young ones talk about getting a mortgage, the rate of interest might only be for a fixed term of two years then they have to start looking for some other favourable deal.
If the interest only was a 'deal' for ten years the lender can technically call in the loan, the sort of thing which happens to business people when they have a cash flow problem but lots of work and they end up bankrupt.
When the market was buoyant I read in the paper that the banks, I think Hx, were wanting a chunk of the profit where property had risen in value more than inflation.
I still think more heads should have rolled because of the state of the banks and agree with Chrisof Wessex about the criterion for getting a mortgage in the 60's. -jl

We had a mortgage like Chris, based on husband's wage. It was restricted to two and a half times his gross salary. That meant that the repayments were about one third of his net income and assumed to be affordable.

I can empathise with those mis-sold interest free mortgages as I was mis-sold and endowment mortgage. I don't think its fair to call anyone stupid in any context and certainly not in this one. I can't speak for anyone else, but for my own part I was a lot younger and trusted my bank manager to find the right type of mortgage for me, I feel there may be another influx of claims for mis-sold mortgages and rightly so. The banks really should have thought about this more clearly esp given the endowments. Thankfully, I managed to change mine to repayment or I may have lost the house. Good thread Rose x