This week, the London Times carried a story claiming that a retiree, aged 102, received a 25-year mortgage. However, there is little realistic chance of repayment. He will have to live until 127 before he makes the final payment. According to the article, this guy is a property investor who has taken out an interest-only £200,000 mortgage. He plans to meet the £958 monthly repayments with income from rent.
The broker who arranged this deal - Jonathan Moore, of Mortgages for Business said. “Obviously there is an element of risk if property prices and rental income suddenly fall but there is no sign of that at the moment.” What about the risk that this investor dies in the next six months? More generally,it is hard to see how this 102-year-old man understood what he was signing.
The story generated a response from a UK group representing retirees. Gordon Lishman, the director-general of Age Concern, said: “It’s crucial that people think about the long-term implications.” When you are over 100 years old, next week is long term.
The UK housing market – it is absolutely insane.
Ah, I hope that man lives for 130 years and proves everyone wrong.
ReplyDeleteOh my goodness. That made me laugh out loud. Not saying that he can't live that long but the odds are normally not that good. Maybe he might just prove us wrong.
ReplyDeletePerhaps there is something that we do not know, it is the bank that takes the risk, not the mortgage for business.
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