I was amazed to see this in print - a banker acknowledging how paying mortgages make no sense compared with renting
I have two friends who would be better off walking away from their houses and renting but have not (yet).
Meanwhile others are simply stopping the cash payments and waiting for the banks to take action.
Mr Bell warned the bank would consider further steps against those not currently servicing their mortgages, including legal action if necessary. He added that the bank’s aim was to work constructively with customers but noted that the average mortgage repayment per month is usually considerably less than the householder would pay in rent.
What he is saying is that the monthly mortgage payment that the people cannot allegedly afford is still less than they would have to pay to rent a similar place. So they are better off to stay put and pay the mortgage than they are to move out and pay rent.
If collectors ring you up and you claim your 700 euro a month interest only is ‘too high’, ‘not affordable’ etc. they’ll quote equivalent properties for rent on daft and my home. Typically these start at 1,100 or 1,200 a month for a decent 3 bed around Dublin. So if/when they turf you out on the street for non payment of your secured debt you’ll have to rent at a higher rate with the great unwashed.
In the meantime while all this goes on the lesson is renters are dumb asses. Gear yourself up to your tits, that’s the only game in town.
For some people the significant figure is not the difference between interest payments and rent, it is the difference between no payments and rent. It is very hard to find a decent place for €0 per month.