Mortgage/ loan holidays during lockdown

[Wales4rugbyWC23]

I know we are all facing challenging times. Are there any Japanese banks offering mortgage holidays for a couple/few months. They are doing this in the UK now and it has no effect on your credit rating. My brother did this in the UK over the phone and it was surprisingly easy. I still have 27 years on my Mitsui Sumitomi mortgage, so either adding two or three months at the end of my payments wouldn't make that much of a difference, but would make difference now in what could turn out to be a two or three month lockdown.

No doubting it would probably involve stamping your seal a million times and having to write your address in illegible Kanji. If my mortgage application procedure was anything to go by.

Any advise or experiences would be appreciated. I don't really want to know about additional business loans that are on offer, just mortgage holidays.

[ricardo]

The UK government forced the bank to do it.

The Japanese government has not done so.

They may ‘urge’ them.

The best thing to do is ask your bank if you’re having difficulty, or expect to have difficulty. They may help you.

Be aware the suspending monthly payments does not suspend interest, your loan becomes disproportionately bigger because of interest on interest.

There’s no free money here.

If you could pay only the interest, but no capital, that would be better.

[Wales4rugbyWC23]

Just got a phone call back from SMBC and over the phone and they said we can have three months off our mortgage, I know we are just delaying the payment, but it just gives us some breathing space, not only that we only really wanted one or two months off and they gave us three months, no need for inkan to be stamped ten thousand times or to write you address out in illegible kanji. Just over the phone... Thank you SMBC

[Bubblegun]

I had to contact my mortgage lender in the UK because not only do I have the UK shutdown going on, but my tenant has decided to buy his own house. So since I have been over paying my mortgage for years,I emailed the bank to ask for that extension, telling them I just want to revert back to the normal mortgage rate and not take the holiday they offered. So it is still paying off the capital and interest.
Personally I think the banks make out they're doing you a favour, but as someone pointed out, that interest will still tick up, and will accrue over the life time of the loan. I may save 600, pounds now, but those 600 spondulies will sure cost a chunk over the life of the mortgage. Once life returns to normal,( and I hope it does), I want to catch up on those overpayments.

[Wales4rugbyWC23]

I haven't been offered a mortgage holiday on my buy to let yet in the UK, also they haven't reduced the interest rate, either. Fortunately, I have got a tenant and my repayments aren't that large now.

My Japanese loans holidays are for the duration of the national emergency only, and that is because in all likelihood our school's turnover is going to be hit next month if they do not open the kindergartens and nurseries because we do a lot of classes through them. Our actual classrooms have actually weathered the storm quite well, but the kindergartens and nurseries are 30% of our turnover, in other words our profit. They will come back, but I know a lot of people on this blog have been far more severely affected than ourselves.

[KyushuWoozy]

So it is still paying off the capital and interest.

Just curious why you didn't opt for interest-only mortgage? That's most common for buy-to-let mortgages.

[KyushuWoozy]

I haven't been offered a mortgage holiday on my buy to let yet in the UK

I may be misinterpreting what you wrote, but as I understand you need to contact your lender if you want to request a mortgage holiday.

[Wales4rugbyWC23]

I haven't been offered a mortgage holiday on my buy to let yet in the UK

I may be misinterpreting what you wrote, but as I understand you need to contact your lender if you want to request a mortgage holiday.

You are right, I think them assuming that you would want a mortgage holiday is even stretching the greatest of telepathic building societies.

[Bubblegun]

So it is still paying off the capital and interest.

Just curious why you didn't opt for interest-only mortgage? That's most common for buy-to-let mortgages.

That’s a very good question.
Your right nearly everyone I know who is renting out has an interest only mortgage.
Well, I thought about it, and I realized if they are paying say 600 pound rent, they can pay off the interest and capital. In a way, it’s them paying the bank not me and once it’s payed off I’m left with nothing to pay. On top of that if the properties value increases, the gap between the value and actual loan ( which is falling) starts to widen.
.They tried to get me to take interest only but I’m a big believer in The big print giveth and the small print taketh away.
Anyway I also ran a test through this calculator.

https://www.thecalculatorsite.com/finan ... ulator.php

100,000 home value grows at 1.5% would grow to
135,000. At the same time, the tenants are widening the gap, so now there is only a 25,000 pound mortgage.I hope you can see where this is going.
Originally I thought I could take 300 pound a month from the tenant and stick it in something but that would return only 80,000 over 15 years at 5% growth.which still isn’t enough to pay the 100,000 grand off. The bank still wants 100,000 to pay it off.
I also thought it’s better to provide a service, help them out, they help me, and I will have an asset that I could sell or, I can keep the house and receive the rent, and I don’t have to pay the bank 100,000 grand because it’s already payed off by them. While the tenant pays the mortgage I decided that time was important.
1) faster payment of the mortgage means less interest.interest to me is just another charge, so get the tenant to pay it, while they’re there.
2)once it’s finished, the freed up time allows us, to take that money and put it somewhere else.
If I get 400+ pound profit per month, I could put that into something else for another 15 years at say 5% that turns out to be 107,000. ( but I don’t expect that,( So I won’t be disappointed) (I’ll probably do something else with the money)
Probably not the smartest investment, but I’m ok with it.

[Bubblegun]

So it is still paying off the capital and interest.

Just curious why you didn't opt for interest-only mortgage? That's most common for buy-to-let mortgages.

That’s a very good question.
Your right! Nearly everyone I know who is renting out has an interest only mortgage.
If my mortgage was eg 350 a month (interest only) for 25 years thats 105,000, in interest, and they'd still want the 100,000 capital.
Well, I thought about it, and I realized if they are paying about 600 pound rent, they can pay off the interest and capital. In a way, it’s them paying the bank not me and once it’s payed off I’m left with nothing to pay. On top of that, if the property value increases, the gap between the value and actual loan (which is reduced) starts to widen. Another thought was, If values ever dropped..... I wouldn't mind, since the mortgage is slowly being eaten away.
They tried to get me to take interest only, but I’m a big believer in "The big print giveth and the small print taketh away". Not to mention the previous “interest only mortgages called endowments”.
Anyway I also ran a test through this calculator and when you think interest rates were at 6% ( at one point) it just made even more sense that the tenant payed the capital and interest.
https://www.thecalculatorsite.com/finan ... ulator.php

100,000 home value grows at 1.5% would grow to 135,000.
At the same time, the tenants are widening the gap, so now there is only a 25,000 pound mortgage. So I hope you can see where this is going at the end of the mortgage.
Originally I thought I could take 300 pound a month from the tenant and stick it in something but that would return only 80,000 over 15 years at 5% growth.which still isn’t enough to pay the 100,000 grand off and the bank still wants the extra 20,000.
I also thought it’s better to provide a service, help them out, they help me, and I'll have an asset that I could sell or, keep the house and receive the rent, and I still don’t have to pay the bank 100,000 back.
Of course I’ve got costs but then again, what product doesn’t have costs.
While the tenant payed the mortgage I decided that "time" was also important.
1) Faster payment on the mortgage means less interest.Interest to me is just another charge the bank collects, so get the tenant to pay it faster, while they’re there, and I can collect it later. A saving of 30,000 in interest payments that the bank would have collected, isn't going to them.
2) Once it’s finished, the freed up 10 years allows us, to take that money ( that would have gone to the bank interest) and put it somewhere else.
If my mortgage was eg 350 a month for 25 years thats 105,000, in interest, and they'd still want the 100,000 capital.
https://www.moneysavingexpert.com/mortg ... alculator/

Now, If I get 400+ pound profit per month, I could put that into something else for another 15 years at say 5%, that turns out to be 107,000. ( but I don’t expect that,So I won’t be disappointed) (I’ll probably do something else with the money).
I’m Probably not the smartest investor, , but I’m ok with it.