100 Year Mortgage Anyone?

This one has got my blood boiling……Politicians contradicting themselves? Surely not……

The background bit……

Not too many years ago it was really easy to spend money you didn’t have and the UK went on a credit card spree. When the credit cards were ‘maxed out’ it didn’t matter as the UK went on a remortgage frenzy and released equity from their homes to clear the credit cards. And the credit card spending started again…….repeat over a few years.

Well, the banks (and rightly so) were blamed by Downing Street for this reckless lending and effectively turning short term debt into long term 25 year mortgages. Downing Street did nothing (they don’t run Government the banks do you see) and the banking crisis resulted. Since then, the banks have had to fight their way out of a corner that they put themselves in.      

Cut to the chase then Steve……

Buried amongst the stories of Cameron flirting with Obama in America this week was the suggestion that the Treasury (that’ll be George Osborne then) are considering converting some of the Government’s 30 year loans it has to 100 years to make the interest rate repayments cheaper in the short term.

So let me get this right……

You’ve been on a spending spree you couldn’t afford? Yes

You needed to borrow in the short term to pay for it? Yes

You now want to make that short term debt a long term 100 YEAR debt? Yes.

I rest my case your honour. No further questions.

Verdict: Ugly