Originally Posted by Thrush
So if I pay £312 every month for 20 years I end up paying £74880, but I still owe £75k, and I don't own the house/flat I live in right?
But if I do it on a capital repayment mortgage, and pay £438 a month for 25years (300 months) I end up owning my house/flat totally, but I will have paid £131400 for a house only worth £75k.....????
Neither of those make any sense
I don't get it - people say you can make money from houses, but if your paying £131k for a house you can only sell for £75k, surely you LOSE money?
your figures are correct and do make sense!
you are borrowing 75k off someone for a long period of time.... 5% charge in interest every single year for everything you still owe against the balance. if you ONLY pay £312 then you will never be eating away at the balance and get charged the 5% on 75k for every year.
BUT you are forgetting that 75 house in 25 years time will go up in value...! last couple of years I think house prices have gone up 16% a year...
16% every year is perhaps a bit too unrealistic but say on average it went up in value 8% then after 25 years..... your house would be worth £514k!!! and you only paid £131k with mortgage and interest?? £383k profit?? and there's no money in houses??
