Sub-one per cent deals are a sign of ‘utter stupidity’ – Star Letter 20/08/2021

Sub-one per cent deals are a sign of ‘utter stupidity’ – Star Letter 20/08/2021

 

This week’s first comment comes from LankyDes in response to the news that Yorkshire Building Society was bringing out sub-one per cent mortgages up to 75 per cent loan to value (LTV).

He said: “[This is] evidence of an economy gone wrong for 40 years. Utter stupidity these rates, there is no value in the money used to lend any more. Only asset prices matter as the rich know – with their six country houses – that even they might not be safe if [the] money to buy them loses its value.

“Money put into assets like that has been sucked out of the real economy and will stay out forever. Please don’t give me the politics of envy. I envy nobody on Earth. Indeed, I pity people who have such a desire for wealth.”

Stephen Barry also had a view on the low-rate market, as he reacted to the news that TSB was adding a 0.84 per cent deal to its range.

Barry pointed out the discrepancy between these low rate deals, often offered to borrowers with 25-40 per cent equity in their homes and older homeowners who tended to have more equity but were paying higher rates.

He said: “With the latest mortgage deals of less than one per cent with an LTV of 75 per cent it would be interesting to note why the retirement equity release mortgage sector is still on average three times more than that.

“Most clients seeking to release some equity to subsidise their state pension or repay their end of term interest-only mortgages have on average 66 per cent equity.”