I unfortunately bought in 2006 and am trying to figure out if I am better off over the term of my 30 year mortgage with 1 % above ECB tracker, than someone who borrowed an amount that would buy an identical property at today's prices with an average standard variable rate.
If my mortgage in 2006 was 450000 and today my property (and mortgage required )is 60% less. I.e. 270,000, after a 30 year term assuming rates remain unchanged (unlikely I know), would I be better off?
Maths boffins..... Thank you
The person who bought in 2006 also has 7 years of mortgage payments made.
I would have thought that point was not relevant.Great point.
I would have thought that point was not relevant.
I have a choice of buying a house with a €200k mortgage today at 4.5% or to take over a mortgage of €500k @ECB + 1%.
Instinctively, I will buy today with the 4.5% mortgage.
€500k @1.5% for 23 years is €2,143
€200k @4.5% for 23 years is €1,164
So I am saving €1,000 a month for 23 years.
I also have the huge advantage of flexibility. I can trade up or down as I am not in negative equity.
If you manage to overpay the 'extra' 1K on the 4.5% mortgage it will be worth a lot more than if you had over paid on the 1.5% mortgage.
So you have to compare like with like.
Landlord bought a house in 2006 on a cheap rate with tax relief.
Bronte decided not to buy.
Now compare the two today.
So look at Bronte's position from 2006. He has paid rent for the last 7 years, while Landlord has been paying interest.
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