did you know inflation can go down, but you will still be worse of.
Example
Say in last 12 months inflation was at 5%, and 12 months ago a loaf of bread was £1, so with inflation of 5% that means that that loaf of bread is now £1.05, now if inflation goes down to 2%, you are still not any better of, as the price of that bread will go up by 2% from £1.05 to about £1.07 a loaf
If it goes down too much it's called deflation, and if that happens we are even more in the s**t than we are now.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Currently CPI and RPI inflationary measures are still higher so granted thing are technically more expensive than say in Apr this year. So things are still more expensive.
The fun begins next spring when oficially CPI will go to less two % and a minus rates for RPI(incl Mort payments) and it will happen...then the debate begins later at A/Review over cost of living and will certainly get lively.
The mortgage payment for everyone will get cheaper and thats certainly an absolute certainty....BROWN wants all Mortgages payments to align to base rate and will use words and the LAW to enforce this.
If you are on Interest only mortgage, you could pay 0 every month for a VERY LONG TIME when base rate hits 0! On Tracker you could pay probably jsut above zero...o.1% ..again how these BIG saving will be seen at A/Reviews is all up in the air....things are getting VERY INTERESTING!
We have not been here before and the BANKS are scared as Hell.They will make very money this year and the next....Amen
I forgot to add that it has even been suggested that for some people who have a clause in their trackers to say they pay 1% below Baserate - In some perverse way -THE BANKS MAY HAVE TO PAY them the 'minusinterest' on the mortgage...as it isn't in the contract to say otherwise..so can go to court. Its a loop hole.
Last edited by kalla on Mon Dec 08, 2008 12:15 pm, edited 1 time in total.
If that is likely to happen, I can see banks etc stopping people changing to interest only mortgages as they are likely to have everyone wanting to change over!
Problem is, you might not be paying anything towards your mortgage - but you will be paying it towards your IVA (or a good proportion of it anyway!).
As to the discounted tracker - that is only on repayment mortgages and so you will end up paying more off the capital quicker than you would have done.
Nice thought, but I can't see it happening.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Interest only Mortgages are are now out of fashion with he Banks -its only for those borrowers with a certain 'lumpsum' somewhere to pay off the Home loan.Maybe a pension lump sum big enough for that or to roll over part of the Home loan outstanding.
However,Banks like TSB have said that under difficult circumstances they will allow people to switch to Interest only.As the borrower will default otherwise....the mantra is now 'keep people in homes'
I mean if you say to your lender -I can only pay the interest, then what can they do but to switch you to Interest only payment plan.
Last edited by kalla on Mon Dec 08, 2008 5:13 pm, edited 1 time in total.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
