Interest Only Mortgages

[z106]

Qwertyuiop, this is getting embarressing. You've not included the cost of the mortgage - which at a rate of 5.25% (todays rate) would mean even though the property increased in value over the period you've paid more for the mortgage than the property has risen in value - in any terms - real/nominal/whatever.

I appreciate you may have tenants paying this via rent but you got to include all figures rather than just playing around with magic numbers.

The whole point of my earlier post using the example of 1million was for illustration purposes only.
I actually was purposely picking numbers out of thin air.

I was specifically replying a previous thread where someone was saying it is real terms that matter - not nominal terms.
I used the above illustration to in fact illustrate the opposite.

That was the only point of my post.

People were not supposed to get bogged down in the figures i used.
Perhapos i should have stated that more clearly.

But if were to take those figures, then say with an 80% mortgage it would require a yield of 4.2% based on current interest rates of 5.25%.

That yield is available currently in dublin city centre.

 

[z106]

But the poster was gloating about how clever he was on the original thread.

The reason I started the previous thread is because many many time on this site people would come on asking whether they shoudl sell a property.
So i figured for once and folr all create a thread dedicated to teh argument.

I always have - and still do - strongly think that someone should NEVER sell (unless they absolutely have to).
If you want to realise some cash then remortgage.

The reason I gave for this logic is all in the other thread.
It's a school of thought which I amongst many others adhere to.

I would certainly not call it gloating drawing on my own experiences as an example of that investment strategy.
In fact - if anything it showed i was putting my money where my mouth was instead of just mouthing off hypothetically.

 

[redo]

The reason I started the previous thread is because many many time on this site people would come on asking whether they shoudl sell a property.
So i figured for once and folr all create a thread dedicated to teh argument.

I always have - and still do - strongly think that someone should NEVER sell (unless they absolutely have to).
If you want to realise some cash then remortgage.

The reason I gave for this logic is all in the other thread.
It's a school of thought which I amongst many others adhere to.

I would certainly not call it gloating drawing on my own experiences as an example of that investment strategy.
In fact - if anything it showed i was putting my money where my mouth was instead of just mouthing off hypothetically.

If you NEVER intend selling, how do you expect to 'realise' a profit?

 

[z106]

So whats your plan if they will not keep the current favorably fixed rate interest only terms going?

As an update, I have been onto the bank manager and have been informed that he would see it very unlikely for the bank to insist on capital repayments.

 

[Kemo_Sabe]

As an update, I have been onto the bank manager and have been informed that he would see it very unlikely for the bank to insist on capital repayments.

someone's view is worth nothing, ask him to put it in writing TODAY

 

[JohnBoy]

As an update, I have been onto the bank manager and have been informed that he would see it very unlikely for the bank to insist on capital repayments.

An excellent reason not to buy the shares of an Irish bank (if an Irish bank is doing the lending here).

 

[grackal]

As an update, I have been onto the bank manager and have been informed that he would see it very unlikely for the bank to insist on capital repayments.

Thats great news for you. As the lads say, get it in writing!