More and more people are finding the only way they can afford to buy a home is by taking out a loan that will never pay off the cost of the property.
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It looks to me as if the banks are trying to keep house prices artificially high - along with the longer paying-off periods for a mortgage that I have heard about. It is making young people pay a lot of money and at the end they will not even have paid for their house! Why not call it leasing the house - that would be more honest! Perhaps the lenders should remember how many were in trouble for mis-selling endowment mortgages. The original sale price was not necessarily paid off then either!
Mrs Harper, Benfleet
Interest-only mortgages can be a good element in a carefully planned strategy. When my daughter wanted to buy a flat in London, there was a good chance that she would not want to stay there very long so we decided that a repayment mortgage was not appropriate. With much of the first years' repayments covering the mortgage costs it was unlikely that little, if any, capital would have been paid off. Endowment mortgages have had a bad press recently so we decided on an interest-only mortgage, with the difference between the monthly payments for that and a repayment mortgage put into an ISA. As expected she moved on, but after six years her ISA was worth approximately £8,000. I wonder if she would have actually repaid that amount of capital with a repayment mortgage?
Paul Davies, Stratford-upon-Avon
The only fact to be taken into account is whether the individual feels better paying interest on a likely increasing asset, or paying rent to help add to the portfolio of a buy-to-rent enthusiast - by far the main culprits in bottom-of-the-market house price inflation.
Bill Ward, Torbay
I could almost hear the oozing from the mortgage officer on the programme saying that "interest-only mortgages were best for some people". What rubbish! Not only do you own all the debt in 25 years but you pay considerably more in interest over the this period. The only people this is good for is the lender!
Paul Hopkins, Lincoln
As we are currently in this situation I listened to this item on interest-only mortgages. With increasing incredulity I realised that you were simply intending to describe the problem, without giving listeners any clue as to how to deal with the issues raised, and so it proved! For goodness sake, what use is this? Wake up... people don't want to hear your "experts" drone on about how foolish they've been. They want answers to how to deal with the situation.
George Smyth, Belfast
I thought the programme's handling of the issues was very naive and one-sided. In my experience, they are not used for long-term purposes as very few people are likely to receive a lump sum or other means of paying them off, and endowments are still feared. Buyers seek to add value and then sell the property so that they can move up the ladder and onto other forms of mortgage. I am not aware of anyone who maintains an interest-only mortgage for longer than 10 years.
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