I’ve paid off the mortgage on my mansion!!!!

[ziknik]

On this day the 7th of April in the year 2025, I have made the final mortgage payment on my mansion.

 

In 2010 money, the price of the mansion was circa £1m and way beyond my reaches.

 

This thread details the investment choices that allowed me to buy and pay for my mansion within 15 years.

 

It’s got 8 bedrooms and 6 bathrooms if anyone is interested in the details of the property itself. It’s in XXXXX and is more of a big house than a mansion. The gardens are fairly small for the size of the property as I don’t like gardening.

[ziknik]

Month 1 – May 2010

 

I’m not sure what to buy this month….. I’m going to hold on to the Sterling in my current account while I have a think about it.

 

[El Dali]

On this day the 7th of April in the year 2025, I have made the final mortgage payment on my mansion.

 

In 2010 money, the price of the mansion was circa £1m and way beyond my reaches.

 

This thread details the investment choices that allowed me to buy and pay for my mansion within 15 years.

 

It’s got 8 bedrooms and 6 bathrooms if anyone is interested in the details of the property itself. It’s in xxxxxx and is more of a big house than a mansion. The gardens are fairly small for the size of the property as I don’t like gardening.

 

 

All the best chap !

[littledavesab]

It’s got 8 bedrooms and 6 bathrooms if anyone is interested in the details of the property itself. It’s in xxxxx and is more of a big house than a mansion. The gardens are fairly small for the size of the property as I don’t like gardening.

 

Hi Zik good to see you joining the diary section. Will be very interesting to see how you get on.

 

I must admit I have (or am in process of ) swinging from having a foot in the deflation camp point of view wise to having one foot in the stagflation camp and the other in the high inflation camp - mentally speaking.

 

Your recent comments on another thread re buying a house and loading up on a (presumably fixed) interest rate mortgage interest me and have got me thinking. As someone who has a fair amount of equity in his own home, but being of a cautious nature (usually) does not want to sell up - re-mortgaging and extracting/shifting some equity does appeal. I would not want to bung a house load into gold at the current price but I will consider regular monthly purchases of gold and other safe currencies.

[ziknik]

All the best chap !

Thanks

 

...

Your recent comments on another thread re buying a house and loading up on a (presumably fixed) interest rate mortgage interest me and have got me thinking. As someone who has a fair amount of equity in his own home, but being of a cautious nature (usually) does not want to sell up - re-mortgaging and extracting/shifting some equity does appeal. I would not want to bung a house load into gold at the current price but I will consider regular monthly purchases of gold and other safe currencies.

The Tory’s will be holding an emergency budget within the next 50 days. I would hang fire and see the budget before making any decisions.

 

A lot of the comments I have made recently were made in the belief the election would be won by Labour….. It’s not happened.

 

My mortgage is variable interest (2 years BofE followed by SVR). I signed up believing Labour would always keep interest rates lower than inflation, using money printing as a tool. Now the Tory’s are in, I think they might just manage to hold interest rates down by slashing the deficit….i.e. I’m pointing my toes towards the deflation camp and I might stick one toe in to the deleveraging camp.

 

I’m feeling very uncertain about everything right now. I think having a mortgage has changed me.

 

[littledavesab]

Thanks

The Tory’s will be holding an emergency budget within the next 50 days. I would hang fire and see the budget before making any decisions.

 

A lot of the comments I have made recently were made in the belief the election would be won by Labour….. It’s not happened.

 

My mortgage is variable interest (2 years BofE followed by SVR). I signed up believing Labour would always keep interest rates lower than inflation, using money printing as a tool. Now the Tory’s are in, I think they might just manage to hold interest rates down by slashing the deficit….i.e. I’m pointing my toes towards the deflation camp and I might stick one toe in to the deleveraging camp.

 

I’m feeling very uncertain about everything right now. I think having a mortgage has changed me.

 

Hmm I was feeling the positive glow of the markets until recent events reminded us that things can change very quickly - it seems politics, finance and sports all seem to have the abilty to turn on a dime.

 

I wouldnt mind a mortgage which is capped or fixed rate but one that could be paid off sharpish (no doubt a fee would be charged) if one changed their mind. At current low interest rates such a deal could have only limited downside. The difficult thing will be working out where to allocate the cash.

 

I see Nationwide have 5 year fixed deal @ 5.14% - but early repayment fee is 5%. Current SMR 3.99%. By comparison ISA = 2.75% & 3 year bond = 4.15%

 

Part of me asks is 5 years long enough. I guess that if things do go pear shaped within the 5 years then hopefully a diverified strategy will be positive not negative outcome wise....

 

Personally I think that the BOE and the rate setting comittee will do their best to keep IR's low but will they succeed - like many on GEI I do fear they will reach a moment of truth - the question is what way will they jump - inflationists think they will print and print, deflationists think they will print, fail and be boxed in by the markets. Party policies (less) and outside events (more) will be the deciding factor and a quote springs to mind "events, dear boy, events".

 

[ziknik]

Hmm I was feeling the positive glow of the markets until recent events reminded us that things can change very quickly - it seems politics, finance and sports all seem to have the abilty to turn on a dime.

 

I wouldnt mind a mortgage which is capped or fixed rate but one that could be paid off sharpish (no doubt a fee would be charged) if one changed their mind. At current low interest rates such a deal could have only limited downside. The difficult thing will be working out where to allocate the cash.

 

I see Nationwide have 5 year fixed deal @ 5.14% - but early repayment fee is 5%. Current SMR 3.99%. By comparison ISA = 2.75% & 3 year bond = 4.15%

 

Part of me asks is 5 years long enough. I guess that if things do go pear shaped within the 5 years then hopefully a diverified strategy will be positive not negative outcome wise....

 

Personally I think that the BOE and the rate setting comittee will do their best to keep IR's low but will they succeed - like many on GEI I do fear they will reach a moment of truth - the question is what way will they jump - inflationists think they will print and print, deflationists think they will print, fail and be boxed in by the markets. Party policies (less) and outside events (more) will be the deciding factor and a quote springs to mind "events, dear boy, events".

 

I am taking a chance on variable. However, I’ve always thought it is very important to go with your own instincts. It’s your money, you know your situation better than anyone else on this site and you need to sleep at night. Fixed is probably better for you if you believe it is better.

 

I suspect any spike in interest rates will not come within the term of the current parliament so you may want to consider a deal that is longer than 5 years. Our total debt is around 60% of GDP (I haven’t got exact figures) and forecast to top out in 2014 at around 90% of GDP. We are in no where near as much trouble as other countries… YET. The deficit is dire and this must be cut. We are running at 12% of GDP per year and we really really need to get below 6% quickly and below 3% soon. Things will be looking really dire in 2014 if we haven’t made any cuts as our total debt is approaching 100% of GDP. Greece has failed to make any cuts for years while its total debt has been above 100% of GDP. We are not that bad…. YET

 

I’m not sure if there are any fixed rate mortgages that offer no early repayment / product fees. I’d definitely recommend a mortgage without any of these charges as it will enable you to switch easily when you find a better deal. I’ve found these three search engines cover the best of the mortgage market: Money Supermarket, FSA Tables and MoneyFacts

 

http://www.moneysupermarket.com/mortgages/

http://www.moneymadeclear.org.uk/tables

http://moneyfacts.co.uk/compare/mortgages/search/

 

For comparison, you might also want to look at the best variable rate you can get.

[ziknik]

OK, I've done my first trade

 

I've shorted 'Gilts June' using Capital Spreads.

 

Gilts seem to go up and down a lot so I'm hoping to sit tight until I've hit target.

 

Target - 114.47 (will move down each day to cover fees)

[John Doe]

Nice thread.

 

Always thought the authorities would keep them too low for too long (until the markets decided enough was enough) and now with torylib it seems they will have some breathing space.

 

With the election over I too think interest rates will now be low for at least a year or two now.

 

However, when my current fixed rate is up in a year and a half, I will be looking to grab a 10 year fix (brittania perhaps).

 

Think it may just be the deal of the centuary if I can get the timing right.

 

[ziknik]

It's certainly worth keeping an eye on the long term fixed interest mortgages.

 

I'm not able to consider these for myself as they all have fairly heavy early repayment charges and no ability to port over to a mansion (or any other house) in a few years time

[VictorBroom]

I’m not sure if there are any fixed rate mortgages that offer no early repayment / product fees. I’d definitely recommend a mortgage without any of these charges as it will enable you to switch easily when you find a better deal.

 

I took out a 15 year fix with Britannia about a year ago. There were a couple of different options, such as slightly higher rate with no arrangement fee etc. Mine is portable, I can overpay up to £500/month without penalty and I can come out totally, every three years FOC.

 

As has been said, a mortgage is personal to what each individual is doing with their life. This one suited me down to the ground.

 

Looks like they only do a ten year now:

http://www.britannia.co.uk/_site/channels/...ixed-rates.html

 

Britannia are now part of the Co-op. I will get a dividend twice a year as well. Not sure how much though... probably a tenner!

 

[ziknik]

I took out a 15 year fix with Britannia about a year ago. There were a couple of different options, such as slightly higher rate with no arrangement fee etc. Mine is portable, I can overpay up to £500/month without penalty and I can come out totally, every three years FOC.

 

As has been said, a mortgage is personal to what each individual is doing with their life. This one suited me down to the ground.

 

Looks like they only do a ten year now:

http://www.britannia.co.uk/_site/channels/...ixed-rates.html

 

Britannia are now part of the Co-op. I will get a dividend twice a year as well. Not sure how much though... probably a tenner!

I'll be keeping my eye on them over the next few years.

 

15 years is a long time and I am currently locking in to to a BofE tracker

[John Doe]

We wanted a Brittania fix ourselves, but they don't lend on properties like ours.

 

However, with the alterations we are making, we will be able to go with them when we renew.

 

We were with them between 2005 and late 2007 (when we jumped out the market) and found them to be fine.

 

Knew their long term fix were portable, but didn't know there was a get out free every three years. Do you know if they still offer this?

 

 

[ziknik]

We wanted a Brittania fix ourselves, but they don't lend on properties like ours.

 

However, with the alterations we are making, we will be able to go with them when we renew.

 

We were with them between 2005 and late 2007 (when we jumped out the market) and found them to be fine.

What sort of property is it (if you don't mind me asking)

 

Knew their long term fix were portable, but didn't know there was a get out free every three years. Do you know if they still offer this?

Last time I looked, the ERC was [from memory]

 

3% in year 1

2% in year 2

1% in Year 3

0% in year 4

3% in year 5

2% in year 6

... ... ... ...

[HPCsoYESTERDAY]

good luck ziknik - i will be reading your blog with interest.

 

i have a 5 year fix with an 'offset' first direct mortgage, so the interest on any monies i save in my FD savings acc will be offset against the mort interest.

 

the mort is I.O., so i will have a hefty bill to pay eventually, but my strategy for paying this includes riding the pm bull with some (hopefully) cheeky trades on the side

 

obviously, this strategy has a backup plan of some savings as well - however, these 'savings' will be used to buy little gold and silver soldiers if bullion prices fall akin to Q408

 

basically, in a nutshell, my inv strategy is based upon an equilibrium of pms cash, but i will factor other currencies and shares into the mix as i see fit.

 

the catalysts in the equilibrium are pm prices and sterling strength, and these will principally decide the sway of paper to metal and back again. however, i will never be naked bullion or cash and basically only trade a max of 30%ish from each side.

 

i am partial to some paper silver trading as this carries more risk/reward than gold, but am aware this is and will only ever be paper.

 

All the best!

 

 

[VictorBroom]

Knew their long term fix were portable, but didn't know there was a get out free every three years. Do you know if they still offer this?

 

Doesn't look like it unfortunately:

 

Early repayment charges

 

If you repay your mortgage in full or part by capital repayment, or transfer to another product within the periods shown, the following early repayment charge will apply. This will be calculated as a percentage of the amount that you repay early.

10 Year Fixed Rate

 

Repayment up to 31 August 2011 - 6%

Repayment between 1 September 2011 and 31 August 2012 - 6%

Repayment between 1 September 2012 and 31 August 2013 - 6%

Repayment between 1 September 2013 and 31 August 2014 - 6%

Repayment between 1 September 2014 and 31 August 2015 - 6%

Repayment between 1 September 2015 and 31 August 2016 - 6%

Repayment between 1 September 2016 and 31 August 2017 - 5%

Repayment between 1 September 2017 and 31 August 2018 - 4%

Repayment between 1 September 2018 and 31 August 2019 - 3%

Repayment between 1 September 2019 and 31 August 2020 - 2%

Repayment after 31 August 2020 - No early repayment charge applicable

 

 

The 0% ERC was on the 15 year mind you, which is no longer available.

 

[John Doe]

What sort of property is it (if you don't mind me asking)

 

 

Last time I looked, the ERC was [from memory]

 

3% in year 1

2% in year 2

1% in Year 3

0% in year 4

3% in year 5

2% in year 6

... ... ... ...

It's a traditional bungalow for the most part, but the floor to ceiling on the ground floor - front and back - are what they call kalath, (essentially timber frame with render applied onto exterior). However, the gable ends are block skinned (in addition to the timber frame inner) so we are having new block walls added front and back, hence making it tradional construction.

 

We are also adding an upper floor, so the new outer walls will be load bearing as well.

 

Brittania will not lend until we have a full block/birck outer skin.

[John Doe]

Doesn't look like it unfortunately:

 

 

 

 

The 0% ERC was on the 15 year mind you, which is no longer available.

Thought that might be the case

[ziknik]

The table below displays my reasons for believing we are currently safe from a bond market interest rate spike.

 

You will notice

** Our Maturing Debt is the 4th lowest

** Our Gross Financing Needs are the 5th lowest

** Our Gross Debt is the 5th lowest

** Our Average Maturity is the highest

 

It’s our Deficit that is high; the second highest on the list. However, we’ve just elected the slasher government and I expect this deficit to fall

 

There are many other countries in worse shape than us. These countries will be suffering the Bond market before us.

 

http://blogs.telegraph.co.uk/finance/edmun...tern-world-imf/

 

 

http://www.imf.org/external/pubs/ft/fm/2010/fm1001.pdf

 

[ziknik]

good luck ziknik - i will be reading your blog with interest.

 

i have a 5 year fix with an 'offset' first direct mortgage, so the interest on any monies i save in my FD savings acc will be offset against the mort interest.

 

the mort is I.O., so i will have a hefty bill to pay eventually, but my strategy for paying this includes riding the pm bull with some (hopefully) cheeky trades on the side

 

obviously, this strategy has a backup plan of some savings as well - however, these 'savings' will be used to buy little gold and silver soldiers if bullion prices fall akin to Q408

 

basically, in a nutshell, my inv strategy is based upon an equilibrium of pms cash, but i will factor other currencies and shares into the mix as i see fit.

 

the catalysts in the equilibrium are pm prices and sterling strength, and these will principally decide the sway of paper to metal and back again. however, i will never be naked bullion or cash and basically only trade a max of 30%ish from each side.

 

i am partial to some paper silver trading as this carries more risk/reward than gold, but am aware this is and will only ever be paper.

 

All the best!

 

Hello!

 

It sounds like we’ve got similar plans at high level – Except we’ve bought at different times.

 

I was looking at the FD mortgage myself and I would have taken it if I had bought a house at the time.

 

Sadly, FD want a huge deposit at the moment and I am not prepared to sell my gold.

 

I wonder if we will all end up on the same mortgage in a few years time.

 

 

[littledavesab]

Nice to see this thead lively and also the Britannia / Co-Op comments

 

Happened to see a ad for co-op mortgages the other day which was interesting

 

http://www.co-operativebank.co.uk/servlet/...ges?WT.svl=copy

 

With our fixed rate mortgages your repayments will stay fixed so you know exactly what you'll pay every single month. After this period your mortgage will switch to our Standard Variable Rate currently 4.24% .

 

Rest assured this mortgage is also portable so should you want to move before your term has finished you can simply take your current mortgage to your new home. Subject to The Co-operative Bank's Lending Criteria.

 

10 year fix = 5.29% or with no fee 5.49% (fixed) until 31/08/2020

 

Ps ZikI recognise the UK has some good features and there are many different possible outcomes. Did you notice during BOE QE'ing one side effect was some holders sold back longer dated gilts and purchased shorter dated. Still lets hope the belt tightening is sufficient.

 

[ziknik]

Nice to see this thead lively and also the Britannia / Co-Op comments

 

Happened to see a ad for co-op mortgages the other day which was interesting

 

http://www.co-operativebank.co.uk/servlet/...ges?WT.svl=copy

 

With our fixed rate mortgages your repayments will stay fixed so you know exactly what you'll pay every single month. After this period your mortgage will switch to our Standard Variable Rate currently 4.24% .

 

Rest assured this mortgage is also portable so should you want to move before your term has finished you can simply take your current mortgage to your new home. Subject to The Co-operative Bank's Lending Criteria.

 

10 year fix = 5.29% or with no fee 5.49% (fixed) until 31/08/2020

All these mortgage offers aren’t available to me as I don’t want to sell any gold to pay down a 25% deposit. [not sure which smile to use]

 

If house prices increase, I will get my 25% equity when I come to re-mortgage however, this will mean my mansion will cost more than £1m. Inflation giveth and inflation taketh

 

Ps ZikI recognise the UK has some good features and there are many different possible outcomes. Did you notice during BOE QE'ing one side effect was some holders sold back longer dated gilts and purchased shorter dated. Still lets hope the belt tightening is sufficient.

I’m convinced there is only one outcome for the UK. That outcome is “TOAST”. However a lot can happen between ‘Today’ and “TOAST” and I’m hoping to make the best of it.

 

 

I don’t remember seeing any specific data on investors selling longer dated gilts and purchasing shorter ones… However, I’m not sure that this can be seen as a specific risk. The BofE were over paying for the mid ranged Gilts, it would have been rude not to sell them. In fact, the BofE cornered the market to the extent that it was necessary to lease Gilts out again to ease supply shortages. I would have been tempted to sell my Gilts too (if I had any) when there was a big buyer in the market prepared to overpay.

 

It’s obviously better to have long term foreign confidence in your country, especially as we are quite reliant on foreign investors to buy & hold our debt. But I don’t think it is particularly worrying that an investor chooses to hold 2014 over 2035+.

 

It could be seen as a good sign that the investors chose to buy more Gilts at all.

 

It would be interesting to know if foreign investors are returning to buy the mid range Gilts now that the BofE is not openly buying them up.

 

What are your thoughts?

 

 

 

[Wanderer]

Try Kent Reliance - 25 year fix at 5.98% last time I looked. Should see you nicely through a hyperinflationary episode....

[GTG]

All these mortgage offers aren't available to me as I don't want to sell any gold to pay down a 25% deposit. [not sure which smile to use]

 

If house prices increase, I will get my 25% equity when I come to re-mortgage however, this will mean my mansion will cost more than £1m. Inflation giveth and inflation taketh

 

 

I'm convinced there is only one outcome for the UK. That outcome is "TOAST". However a lot can happen between 'Today' and "TOAST" and I'm hoping to make the best of it.

 

 

I don't remember seeing any specific data on investors selling longer dated gilts and purchasing shorter ones… However, I'm not sure that this can be seen as a specific risk. The BofE were over paying for the mid ranged Gilts, it would have been rude not to sell them. In fact, the BofE cornered the market to the extent that it was necessary to lease Gilts out again to ease supply shortages. I would have been tempted to sell my Gilts too (if I had any) when there was a big buyer in the market prepared to overpay.

 

It's obviously better to have long term foreign confidence in your country, especially as we are quite reliant on foreign investors to buy & hold our debt. But I don't think it is particularly worrying that an investor chooses to hold 2014 over 2035+.

 

It could be seen as a good sign that the investors chose to buy more Gilts at all.

 

It would be interesting to know if foreign investors are returning to buy the mid range Gilts now that the BofE is not openly buying them up.

 

What are your thoughts?

 

If you look for a mortgage that is linked to libor you should be able to hedge interest rate risk in the futures market, probably with the short sterling (3 month) contract. You would need to do your home work or if not a bespoke investment adviser would sort you out. Here's some links to give you a feel for it.

 

http://www.bbalibor.com/bba/jsp/polopoly.jsp?d=1630

 

 

http://www.euronext.com/trader/contractspe...MepDerivative=7

[ziknik]

Try Kent Reliance - 25 year fix at 5.98% last time I looked. Should see you nicely through a hyperinflationary episode....

Wow http://www.krbs.com/25yrfix75.aspx

 

It's portable to a future mansion too!

 

75% LTV..... I'm thinking about selling my gold and stumping up a 3% ERC to Nationwide