Very long or interest only mortgages

There is no reason why a bank should not lend money on an interest only basis to be repaid on death by the sale of the house.

I think that the maximum should be around 60% LTV.

There is no reason why a person should not rent a house for life.

There is no reason why a person should not rent money for life.

The problem though would be the impact on house prices.

However, if the current LTV and LTI restrictions were kept it place, it would be fine.

Brendan
 
And the rates would be much higher, obviously.

A Seniors Money facility is an interest-only loan repayable on death through the sale of the house.

In that the person can choose to pay the interest (or not).

At 5.5%.

Interest-only loans from the likes of Dilosk etc are also in the 5ish ballpark.
 
Brendan Burgess said:
There is no reason why a bank should not lend money on an interest only basis to be repaid on death by the sale of the house.

I think that the maximum should be around 60%
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if you had to save over 40 % for a home I don't think you would be going down the route of away higher rates,
for the 60% loan, on a house you never own fully,
 
The banks would still give out 90% repayment mortgages.

But when they get to 60% LTV , they could switch them to interest only.

Brendan
 
why would anyone having reduced their mortgage to 60% go on away high rate for the pleasure of not owning their homes fully
It just doesn't seem right to me,
 
@kinnjohn - why do you believe the interest rate would change when you reach 60% LTV?

As to the second part of your question - I can only respond that people wanting to play video / computer / RPGs makes zero sense to me but I accept that there are enough users in the world to make it a very profitable industry.
 
kinnjohn said:
why would anyone having reduced their mortgage to 60% go on away high rate
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There is no reason for the rate to be higher.

It's a well secured, performing loan.

But even if it were, people may have other priorities e.g. stuffing their pension or setting up a business or helping a kid buy a house.

Brendan
 
Thirsty said:
So my question is still the same - how is paying €150 per month in interest (per my example several pages ago) somehow worse than paying €1000 in rent?
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Because if you are 65, paying rent, and have no income except a state pension, you would (as another poster helpfully added) entitled to Housing Assistance Payment, the state will not give you anything extra to pay a mortgage, whereas if you are renting at that age, you'd both be entitled to social housing (albeit on a long waiting list) or qualify for rental assistance from the state.
Basically if you were a single person on just basic pension at 65 and had no other income, but had rent to pay, state even now would probably pay something close to market rent (minus 20 euro a week or something like that).
Whereas if you still had a mortgage of 1000 a month or so, it would consume your entire income, but there would be no state assistance for you.

I know it sounds unfair that a tenant gets more assistance than a home owning pensioner paying their way, but the tenant is in a more precarious housing situation and the state will assist them.
Anyway the point of an interest only loan is that the original price is still due at the end - its not an annuity so it doesn't pay the entire cost. Traditionally these were either given for rental properties that would be sold at the end of the term or endowment policies where a long term life policy would cover the difference.
 
Thirsty said:
So my question is still the same - how is paying €150 per month in interest (per my example several pages ago) somehow worse than paying €1000 in rent?
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it leave a whopping legal mess for others to sort out
 
lff12 said:
Whereas if you still had a mortgage of 1000 a month or so, it would consume your entire income, but there would be no state assistance for you.
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The point of the proposal is that the borrower would not have to pay interest + capital once a specified LTV had been reached.
 
Thirsty said:
The point of the proposal is that the borrower would not have to pay interest + capital once a specified LTV had been reached.
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Hi
the fact is any bank offering anything like what you are proposing charges over five %,

I am not knocking your proposal, I am just pointing out it is not as simple as you think,

taking your example of the original mortgage 60k in 1995 I think,

I could be wrong and I welcome posters to correct me who are involved in banking and have up to date information
let us say they have cleared half of the 60K so there is 30K left,

Go move that 30K at present to get a better rate to be paid off before you reach 65 few if any would be interested
in taking it on,

I am sure you would get a life loan at around 6% or more, who else would bother offering you a better rate,
They have you over a barrel once the loan drops to a point no other bank is interested in it ,
same as lifelong insurance once you are over 70,
I know they exist in other EU countries but there are snags one being when you reach a certain age If you want to move it is not as easy to get a new mortgage,
another snag is you have to live in the mortgaged home full time, you move into residential care it has to be sold to clear mortgage
problems with the Fair Deal if selling within five years but sure that's ok once it does not affect me,
 
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kinnjohn said:
Hi
the fact is any bank offering anything like what you are proposing charges over five %,

I am not knocking your proposal, I am just pointing out it is not as simple as you think,

taking your example of the original mortgage 60k in 1995 I think,

I could be wrong and I welcome posters to correct me who are involved in banking and have up to date information
let us say they have cleared half of the 60K so there is 30K left,

Go move that 30K at present to get a better rate to be paid off before you reach 65 few if any would be interested
in taking it on,

I am sure you would get a life loan at around 6% or more, who else would bother offering you a better rate,
They have you over a barrel once the loan drops to a point no other bank is interested in it ,
same as lifelong insurance once you are over 70,
I know they exist in other EU countries but there are snags one being when you reach a certain age If you want to move it is not as easy to get a new mortgage,
another snag is you have to live in the mortgaged home full time, you move into residential care it has to be sold to clear mortgage
problems with the Fair Deal if selling within five years but sure that's ok once it does not affect me,
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Good points - lack of competition in the market is a huge factor here.
 
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