mortgage crisis

07734

apologies if this has been asked already, i looked back a few pages and didn't see anything.

is one of the best tools to help alleviate the current mortgage crisis not mortgage interest relief? it obviously does nothing for those unemployed, or where the debt is totally unsustainable, but would it not help those who are just about keeping their heads above water? (thinking of the headline today about the huge percentage of people who just about break even every month.) it would also benefit most those with big mortgages, which is going to be those who bought from 2005-2008.

i remember reading a few years ago that it was a "bad thing", hence the decision to phase it out, but i can't for the life of me remember the reasons why. would genuinely love to know why it is an undesirable tax break.

beeftotheheels

07734 wrote: »

i remember reading a few years ago that it was a "bad thing", hence the decision to phase it out, but i can't for the life of me remember the reasons why. would genuinely love to know why it is an undesirable tax break.

Timing. It wouldn't be a bad thing now. We can't really afford it, but as you noted in so much as we can afford it, it is a good thing.

But it should have been withdrawn back when the property bubble was heating up. Back then it was making borrowing excessive amounts more affordable for people and encouraging excessive borrowings.

Ditto all the property based tax incentives like s23 relief. In a bubble they should have been withdrawn. As the bubble bursts that's when they should be introduced. This is the basis for the Gov cutting Stamp Duty on Commercial property and introducing a CGT holiday for certain properties.

seamus

Well, it is being used to alleviate the mortgage crisis because those who took out mortgages since 2003 have seen their mortgage interest relief extended and increased a couple of times since the economy went south.

The reason it's being phased out and cut off is because the interest relief effectively served very little purpose except to overheat the property market further by increasing the amounts that people can borrow.

In good times, it was seen as good government spending because encouraging borrowing == encouraging the economy, but with the common sense glasses on, all it does is encourage reckless borrowing and lending in the same way that the first time buyer's grant didn't help FTBs, it just pushed house prices up.

Ultimately if you provide assistance to someone to buy a house, the market adjusts to swallow up that assistance and the net gain to the buyer is nil.

rasper

Because mortgage brOkers and advisors used to add MIR as income , crazy it sounds but 2 advisors said it to me as if it was money in my pocket so I could borrow more
Also should tax Payers cash be usd to fund personal debt