Interest rates increased

Allnamestaken · 6 May 2022 at 00:41

Guess I should get rid of that 1k phone I don't have, subscriptions I don't have, the car on finance I don't own to afford the house I can't afford, pay for the energy bills I cant afford among other things.

Boomers always gonna boom.
Cretins.

HungryHippos · 6 May 2022 at 00:44

SVR is usually around 4% but will get higher as the base rate goes up. I suppose they could cap how high the SVR can get above the base rate to limit that impact.

I can see base rate heading towards 2% in the next 12 months, I hope it doesn't hit 7% because that would destroy a lot of people. 2% is still manageable for most.

Low historic rates were never going to stick around forever, but we have this perfect storm going on with global events in the last 2-3 years, Ukraine war and energy prices are just part of it.

Utility prices from October could get scary.

Energize · 6 May 2022 at 04:10

image hosting

413x · 6 May 2022 at 04:12

HungryHippos said:
SVR is usually around 4% but will get higher as the base rate goes up. I suppose they could cap how high the SVR can get above the base rate to limit that impact.

I can see base rate heading towards 2% in the next 12 months, I hope it doesn't hit 7% because that would destroy a lot of people. 2% is still manageable for most.

Low historic rates were never going to stick around forever, but we have this perfect storm going on with global events in the last 2-3 years, Ukraine war and energy prices are just part of it.

Utility prices from October could get scary.

If I were placing a bet on base rate top I'd say 2-3pc.
It certainly won't need to get higher to stop people spending. The energy price will see to most of the bottom and lower middle rung stop spending

The base rate rise and energy cost will stop most Of the middle rung spending.

I don't see it needing to go higher.

Dirk Diggler · 6 May 2022 at 04:32

Allnamestaken said:
Guess I should get rid of that 1k phone I don't have, subscriptions I don't have, the car on finance I don't own to afford the house I can't afford, pay for the energy bills I cant afford among other things.

Boomers always gonna boom.
Cretins.

Have you considered blaming everyone else for your life challenges? I hear it's very fashionable these days.

Energize · 6 May 2022 at 04:45

moon man said:
Date
Average UK House Price
Average 30 year mortgage rate
Annual interest only payment
1979-06-01
£16,145.25
11.20%
£1,808.27
1980-06-01
£20,044.48
13.74%
£2,754.11
1981-06-01
£21,506.69
16.63%
£3,576.56
1982-06-01
£21,811.32
16.04%
£3,498.53
1983-06-01
£24,167.10
13.24%
£3,199.72
1984-06-01
£26,401.03
13.88%
£3,664.46
1985-06-01
£28,838.05
12.43%
£3,584.57
1986-06-01
£32,493.58
10.19%
£3,311.10
1987-06-01
£37,570.70
10.21%
£3,835.97
1988-06-01
£46,109.23
10.34%
£4,767.69
1989-06-01
£58,657.94
10.32%
£6,053.50
1990-06-01
£57,726.00
10.13%
£5,847.64
1991-06-01
£56,853.13
9.25%
£5,258.91
1992-06-01
£55,165.57
8.39%
£4,628.39
1993-06-01
£53,917.97
7.31%
£3,941.40
1994-06-01
£55,382.55
8.38%
£4,641.06
1995-06-01
£56,033.47
7.93%
£4,443.45
1996-06-01
£56,630.15
7.81%
£4,422.81
1997-06-01
£61,946.00
7.60%
£4,707.90
1998-06-01
£69,757.06
6.94%
£4,841.14
1999-06-01
£75,995.05
7.44%
£5,654.03
2000-06-01
£89,230.45
8.05%
£7,183.05
2001-06-01
£96,499.07
6.97%
£6,725.99
2002-06-01
£113,303.69
6.54%
£7,410.06
2003-06-01
£128,579.45
5.83%
£7,496.18
2004-06-01
£146,384.32
5.84%
£8,548.84
2005-06-01
£156,767.06
5.87%
£9,202.23
2006-06-01
£168,184.13
6.41%
£10,780.60
2007-06-01
£186,348.12
6.34%
£11,814.47
2008-06-01
£181,830.65
6.03%
£10,964.39
2009-06-01
£159,561.06
5.04%
£8,041.88
2010-06-01
£171,688.54
4.69%
£8,052.19
2011-06-01
£167,752.91
4.45%
£7,465.00
2012-06-01
£170,049.16
3.66%
£6,223.80
2013-06-01
£172,654.51
3.98%
£6,871.65
2014-06-01
£187,077.48
4.17%
£7,801.13
2015-06-01
£196,802.46
3.85%
£7,576.89
2016-06-01
£212,886.53
3.65%
£7,770.36
2017-06-01
£221,833.48
3.99%
£8,851.16
2018-06-01
£228,355.31
4.54%
£10,367.33
2019-06-01
£230,049.05
3.94%
£9,063.93
2020-06-01
£234,703.25
3.10%
£7,275.80
2021-06-01
£266,282.76
2.96%
£7,881.97

No wonder us boomers are made of stronger stuff ,some historical interest rates

After me adding in the ONS data do you not think there is a reason the high interest rates were less of an issue back then?

People paying 2.96% interest today are paying twice as much in interest compared to people paying 16.63% interest in 1981.

adam cool dude · 6 May 2022 at 05:47

Energize said:
After me adding in the ONS data do you not think there is a reason the high interest rates were less of an issue back then?

People paying 2.96% interest today are paying twice as much in interest compared to people paying 16.63% interest in 1981.

The price of houses has to be a factor. My father paid 45k for a 4 bed house in 1991. His Salary was easily in the 20k bracket at the time. His mortgage was done by 2000.

We took out 108k in 2010 for our house with a huge deposit. That same house today with the same deposit would require 180k mortgage. Our wages have gone up since then but not at the same amount of house prices.

LabR@t · 6 May 2022 at 06:01

robfosters said:
Exactly, my dad got a mortgage for his £10k. But at that level, an interest rate of 17% was not really an issue. Bit different when your mortgaged for £250k or so.

His wages were lower

LabR@t · 6 May 2022 at 06:03

adam cool dude said:
The price of houses has to be a factor. My father paid 45k for a 4 bed house in 1991. His Salary was easily in the 20k bracket at the time. His mortgage was done by 2000.

We took out 108k in 2010 for our house with a huge deposit. That same house today with the same deposit would require 180k mortgage. Our wages have gone up since then but not at the same amount of house prices.

For the time that was a very high wage.

UK average in 2000 was only 18k

Grim5 · 6 May 2022 at 06:44

Dirk Diggler said:
BBC News - UK interest rates rise to the highest since 2009

https://www.bbc.co.uk/news/business-613198677

Could one of the forum's bucked teeth university educated know-it-alls explain why making things more expensive is the answer to the problems created by things being too expensive?

TIA

Are you serious? Increasing interest rates lowers inflation because it takes money out of the economy - you're reducing inflation because you're lowering demand by reducing how much money people have to buy stuff they don't need like graphics cards

Allnamestaken · 6 May 2022 at 07:08

Dirk Diggler said:
Have you considered blaming everyone else for your life challenges? I hear it's very fashionable these days.

My point was that people blame the younger generation for having these things for the reason we cant afford x or y.

I guess that kinda just went over your head. You know the whole boomer thing about us having cars on finance going on holiday all the time expensive phones, being the reason we cant afford things.

I wasn't blaming anyone for anything lmao.

Richie · 6 May 2022 at 07:10

LabR@t said:
His wages were lower

You've missed the point. @robfosters is simply saying that 17% on 10k is far less in interest than 17% on 250k.

There are some people using the whatabout-ism of "at least you don't have interest rates like the 80s" as some for of club to hit current people's fear of current interest rate rises which is a little disingenuous considering the difference in interest amounts.

Take a look at post 127 to see how it's different.

It may be beneficial to add in median wages to that table if someone @Energize ? Is able to do that? (Only on mobile here so not easy to do myself)

Perhaps once the wage column.is added, a better comparison can be made?

Richie · 6 May 2022 at 07:13

Grim5 said:
Are you serious? Increasing interest rates lowers inflation because it takes money out of the economy - you're reducing inflation because you're lowering demand by reducing how much money people have to buy stuff they don't need like graphics cards

All true but I believe inflation, this time around, is being driven by the cost of necessities i.e. food, fuel and gas/Elec which is out-with consumer control

There is little people can do to lower this without potential health consequences.

So they can increase interest rates as much as they like - until they get those items under control, inflation will remain high and we will enter a term of stag-flation

Slam62 · 6 May 2022 at 07:13

Allnamestaken said:
Guess I should get rid of that 1k phone I don't have, subscriptions I don't have, the car on finance I don't own to afford the house I can't afford, pay for the energy bills I cant afford among other things.

Boomers always gonna boom.
Cretins.

Yeah but you enjoyed them while you didn't have them

LabR@t · 6 May 2022 at 07:23

1979 7% of house cost was interest each year

2021 3% of house cost is interest.

Price also rose, but people were still better off in 1979 than they were in 1970. The average weekly wage in 1970 was £18.37, in 1979 it was £68.92. The 1979 wage in 1970 money was £23.79. An increase of 30%.

Mercenary Keyboard Warrior · 6 May 2022 at 07:29

Minusorange said:
Despite higher interest rates, everything was way cheaper and the economy was actually in good shape

You what?
The economy was a terrible state during some of those times.

High unemployment, high interest rates, and high inflation, yeah those were great times!

Allnamestaken · 6 May 2022 at 07:32

Slam62 said:
Yeah but you enjoyed them while you didn't have them

Heck yeah I did ! :cry:

IvanDobskey · 6 May 2022 at 08:13

Worrying times indeed

Three years left on the mortgage fixed term. Hoping to save enough money to pay a good chunk off by the end to lessen the impact.

Semple · 6 May 2022 at 08:34

Energize said:
After me adding in the ONS data do you not think there is a reason the high interest rates were less of an issue back then?

People paying 2.96% interest today are paying twice as much in interest compared to people paying 16.63% interest in 1981.

Don't come in here with all that sense. You'll start to confuse him even after he sobers up.

Colonel_Klinck · 6 May 2022 at 08:39

Minusorange said:
UK GDP growth 2024| Statista

The economy of the United Kingdom grew by an annual rate of 0.9 percent in 2024, compared with 0.4 percent in 2023, and 4.8 percent in 2022

www.statista.com

Doesn't look so bad for the 80's

were 10s of 1000s losing their homes? Were their homes worth less than their mortgage, so even if they couldn't afford their mortgage payments due to ridiculous interest rates they couldn't sell it either without leaving themselves with a huge debt? Inflation rates well above where we are now. Maggie's millions unemployed. Such great times!

Mercenary Keyboard Warrior said:
You what?
The economy was a terrible state during some of those times.

High unemployment, high interest rates, and high inflation, yeah those were great times!

He clearly didn't live through those times or he wouldn't be talking such nonsense. A significant part of the 80s were terrible for a huge part of the population.

Date	Average UK House Price	Average 30 year mortgage rate	Annual interest only payment
1979-06-01	£16,145.25	11.20%	£1,808.27
1980-06-01	£20,044.48	13.74%	£2,754.11
1981-06-01	£21,506.69	16.63%	£3,576.56
1982-06-01	£21,811.32	16.04%	£3,498.53
1983-06-01	£24,167.10	13.24%	£3,199.72
1984-06-01	£26,401.03	13.88%	£3,664.46
1985-06-01	£28,838.05	12.43%	£3,584.57
1986-06-01	£32,493.58	10.19%	£3,311.10
1987-06-01	£37,570.70	10.21%	£3,835.97
1988-06-01	£46,109.23	10.34%	£4,767.69
1989-06-01	£58,657.94	10.32%	£6,053.50
1990-06-01	£57,726.00	10.13%	£5,847.64
1991-06-01	£56,853.13	9.25%	£5,258.91
1992-06-01	£55,165.57	8.39%	£4,628.39
1993-06-01	£53,917.97	7.31%	£3,941.40
1994-06-01	£55,382.55	8.38%	£4,641.06
1995-06-01	£56,033.47	7.93%	£4,443.45
1996-06-01	£56,630.15	7.81%	£4,422.81
1997-06-01	£61,946.00	7.60%	£4,707.90
1998-06-01	£69,757.06	6.94%	£4,841.14
1999-06-01	£75,995.05	7.44%	£5,654.03
2000-06-01	£89,230.45	8.05%	£7,183.05
2001-06-01	£96,499.07	6.97%	£6,725.99
2002-06-01	£113,303.69	6.54%	£7,410.06
2003-06-01	£128,579.45	5.83%	£7,496.18
2004-06-01	£146,384.32	5.84%	£8,548.84
2005-06-01	£156,767.06	5.87%	£9,202.23
2006-06-01	£168,184.13	6.41%	£10,780.60
2007-06-01	£186,348.12	6.34%	£11,814.47
2008-06-01	£181,830.65	6.03%	£10,964.39
2009-06-01	£159,561.06	5.04%	£8,041.88
2010-06-01	£171,688.54	4.69%	£8,052.19
2011-06-01	£167,752.91	4.45%	£7,465.00
2012-06-01	£170,049.16	3.66%	£6,223.80
2013-06-01	£172,654.51	3.98%	£6,871.65
2014-06-01	£187,077.48	4.17%	£7,801.13
2015-06-01	£196,802.46	3.85%	£7,576.89
2016-06-01	£212,886.53	3.65%	£7,770.36
2017-06-01	£221,833.48	3.99%	£8,851.16
2018-06-01	£228,355.31	4.54%	£10,367.33
2019-06-01	£230,049.05	3.94%	£9,063.93
2020-06-01	£234,703.25	3.10%	£7,275.80
2021-06-01	£266,282.76	2.96%	£7,881.97