![]() ![]() 25% tax-free lump sum) will go towards your future larger mortgage. ![]() That phone call to raise your mortgage term is an expensive one.īecause you changed your term or went interest-only, it means that more of your retirement savings (e.g. □□ So where you might think they're helping you by making it easier to extend the term or go interest-only, it works against you and benefits them □Ī £250,000 repayment mortgage assuming 5% interest. This is very good news for the banks because your house is an asset on their balance sheet. When you extend your term, you pile on a lot more interest. This is even more of a possibility for first-time buyers or households with young children who typically borrow more. ![]() it becomes your new normal and the chances of you calling the bank to reduce your term will be minimal because your other costs will keep rising. When you increase the term or go interest-only just so you can afford your mortgage, you get accustomed to life at that cost level. I would not extend my mortgage term or go interest-only □. However, not many people truly understand the consequences. I fully understand that many people might want to do that because of affordability. New rules now make it easier for mortgage holders to extend the term on their mortgages or go interest-only. If you extend your mortgage term or go interest-only, you'll likely be poorer in the future. ![]()
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