How much do Phers have in debts?
Poll: How much do Phers have in debts?
Total Members Polled: 563
Discussion
d lol Mortgage only for me.
Paid all my other debts off before I bought my first house in 2005 and have remained debt free ever since, living by the mantra my parents and grandparents taught me that if you can't afford to buy it in cash, don't buy it at all.
I forgot that and got myself into a bit of a mess with credit cards back when I was 18/19 and having worked hard for 5 years to pay it all off I swore never to be that stupid again.
Paid all my other debts off before I bought my first house in 2005 and have remained debt free ever since, living by the mantra my parents and grandparents taught me that if you can't afford to buy it in cash, don't buy it at all.
I forgot that and got myself into a bit of a mess with credit cards back when I was 18/19 and having worked hard for 5 years to pay it all off I swore never to be that stupid again.
Mortgage, but we run a big one fixed at a low rate for the next 5 years. Overpayments go into ISAs etc, with cash kept for emergency fund.
Equities are looking shaky right now, but ISA holdings are pretty diversified and as we run up to that 5 year limit the hope is that investments will have performed better than the debt interest at 0.95% over that time. I have rebalanced the portfolio, so havent taken the losses i could have had i not , but this year's performance is still bad! Performance over the last 5 years was way better than had i put it into mortgage so hopefully over a ten year period will still have been a good idea.
If interest rates are significantly higher at remortgage time (they will be), the plan is to pay the bulk of it down. This annoys me as it means more of our asses are in the house, which is illiquid, but it saves cashflow. Now holding more cash for this as a proportion as a sort of hedge in a bear equities market: whilst cash is devaluing due to inflation, pound for pound used for the mortgage repayment it is less of an issue. That cash can be re-allocated to investments if the situation improves, or a crash sees some sort of buying opportunity for assets that could make money medium term.
Who doesn't Iove a bit of leverage hedging risk, eh?
If this question was net debt, my answer would have been a lot lower. If it had been debt outside of mortgage, it would have been zero, as it would have been if house equity were taken into consideration.
Risks are of course legion with this approach, and it is not for everyone. In an armageddon situation where equities are worthless, house prices have crashed, interest rates are sky high, we have both lost our jobs and we have to remortgage - problem. Hence a larger cash holding hedge relative to my normal position.
Equities are looking shaky right now, but ISA holdings are pretty diversified and as we run up to that 5 year limit the hope is that investments will have performed better than the debt interest at 0.95% over that time. I have rebalanced the portfolio, so havent taken the losses i could have had i not , but this year's performance is still bad! Performance over the last 5 years was way better than had i put it into mortgage so hopefully over a ten year period will still have been a good idea.
If interest rates are significantly higher at remortgage time (they will be), the plan is to pay the bulk of it down. This annoys me as it means more of our asses are in the house, which is illiquid, but it saves cashflow. Now holding more cash for this as a proportion as a sort of hedge in a bear equities market: whilst cash is devaluing due to inflation, pound for pound used for the mortgage repayment it is less of an issue. That cash can be re-allocated to investments if the situation improves, or a crash sees some sort of buying opportunity for assets that could make money medium term.
Who doesn't Iove a bit of leverage hedging risk, eh?
If this question was net debt, my answer would have been a lot lower. If it had been debt outside of mortgage, it would have been zero, as it would have been if house equity were taken into consideration.
Risks are of course legion with this approach, and it is not for everyone. In an armageddon situation where equities are worthless, house prices have crashed, interest rates are sky high, we have both lost our jobs and we have to remortgage - problem. Hence a larger cash holding hedge relative to my normal position.
Edited by Harry Flashman on Friday 29th July 13:22
rewild said:
This question is as meaningless as the savings one.
Savings or debt amounts are not indicative of much, especially in tax regimes where mortgage interest is tax deductible to the same degree as extra pension payments, and wealth tax is a consideration, e.g. here in Switzerland many people have large unrepaid mortgages (where interest rates are historically extremely low) but proportionally much higher pension pots, which at some point may serve to reimburse the debt, or not, depending on retirement/inheritance aspects.That said, the savings question is vaguely more interesting in that it indicates how people view their employment risk, i.e. how many months of outgoings are retained in readily accessible savings, in case of an unexpected change in employment circumstances.
Is it secured or unsecured debt? What's the overall loan to value of the debt (in mortgage speak)?
If you have £15k of debt on a £150,000 car, you're probably ok if you lose your job.
If you have £15k of debt on your credit card because you fancied a Disney holiday last year, you will have answered this poll the same way as the previous example, but you might well be up the creek if you lose your job.
If you have £15k of debt on a £150,000 car, you're probably ok if you lose your job.
If you have £15k of debt on your credit card because you fancied a Disney holiday last year, you will have answered this poll the same way as the previous example, but you might well be up the creek if you lose your job.
None. No mortgage, no credit cards, nothing. I was insolvent twelve years ago but the financial system in the UK allowed us to keep our home and two low value cars and my wife kept her jewellery. My creditors settled for 16p in the pound.
I'm now retired with the house paid off and a few quid in savings.
What a great country. The Land of the Second Chance.
I'm now retired with the house paid off and a few quid in savings.
What a great country. The Land of the Second Chance.
DickyC said:
None. No mortgage, no credit cards, nothing. I was insolvent twelve years ago but the financial system in the UK allowed us to keep our home and two low value cars and my wife kept her jewellery. My creditors settled for 16p in the pound.
I'm now retired with the house paid off and a few quid in savings.
What a great country. The Land of the Second Chance.
Must be nice to get debts paid by someone else.I'm now retired with the house paid off and a few quid in savings.
What a great country. The Land of the Second Chance.
As for me, just a monthly CC bill. I pay that myself.
Simpo Two said:
DickyC said:
None. No mortgage, no credit cards, nothing. I was insolvent twelve years ago but the financial system in the UK allowed us to keep our home and two low value cars and my wife kept her jewellery. My creditors settled for 16p in the pound.
I'm now retired with the house paid off and a few quid in savings.
What a great country. The Land of the Second Chance.
Must be nice to get debts paid by someone else.I'm now retired with the house paid off and a few quid in savings.
What a great country. The Land of the Second Chance.
As for me, just a monthly CC bill. I pay that myself.
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