Maybe France should leave the EU then..
Mortgage Rate Rises
- Thread starter glenimp617
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Maybe France should leave the EU then..
Soldato
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I get why, if the fix now is really really painful people dont want to lock that in for 5 years
Some element of hopium that they will come back down relatively quickly is in force!
It seems like we are very close to the peak of interest rates so most will be unsure about locking in to a higher rate for a longer period. Knowing that rates are very unlikely to go down to where they were a year ago they aren’t likely to stay this high either.
I also wouldn’t be surprised to see a jump in the number of people clearing their mortgage. At the start of 2022 roughly a third of properties (half of owner occupied) had no mortgage. According to the ONS. So those close to doing it also wouldn’t want to fix for long periods. Although we aren’t likely talking big numbers here. This is what would stop me going for 5 years when mine is renewed next year.
Who was saying that as logically it doesn't make sense - why would you only fix for 2 years when rates are very low? Particularly if you thought rates could go up to 3%??
Soldato
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I would say the Eu is even more complicated than the UK in regards the impact oddly.
We have for sure exported jobs there as a result so whilst they have suffered some inflation as a result (from our exports in SOME cases, many UK business had to suck up the costs to remain competitive), they also benefitted from some (minor) GDP expansion.
So inflation yes, net result fully, I am not so sure they are down.
US and Canada are even worse. I have a cousin who planned to go traveling across North America for several months, only to find with the outrageous prices in supermarkets they would run out of money far sooner than expected!
What you probably need to (but won't be able to, because it's guess work) is think of how much equity you'd be paying back owning.
Even though rent is 900 and mortgage is 1050, some of that, maybe 500? Is paying down the mortgage. (ours equity pay off is 570 per month on a 900 payment)
Problem is, so you think host prices are going to fall by more than this over that initial term? And yes. It's quite possible. I don't envy your decision!
I don't think anyone else is going to leave the EU after seeing what's happening to the UK.
Caporegime
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Because all they know are rates being like 2% for like 10 years and it is the norm, and for the last decade fixing it for 2 years has worked.
Soldato
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Its not because of the Eu.
Its because generally they have better quality food.
The UK has a more aggressive retail food sector as well, lower margins, but with the impact that it supports less jobs.
Soldato
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Or it could be the best decision they could have made. The last few years have shown we can't reliably predict the future..
I doubt many back in 2007-2008 predicted that the base rate would remain below 1% for almost 15 years.....
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Caporegime
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Something about this does'nt make sense to me. The effect of increasing interest rates to curb household spending (and thus inflation) would seem to be a less effective strategy in say, the US or France, where 10-30 fixed mortgages are far more common and many more home owners would be uneffected by central bank interest rises.
Yet the opposite seems to be true. Inflation in these countries seems to be under more control than in the U.K. and responding to interest rate rises.
These countries also spend vast sums of money on covid.
The simple fact of the matter is we're in this boat due to the 'B' word.
Yet the opposite seems to be true. Inflation in these countries seems to be under more control than in the U.K. and responding to interest rate rises.
These countries also spend vast sums of money on covid.
The simple fact of the matter is we're in this boat due to the 'B' word.
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RIPI mean, look no further than Post No.5.
Soldato
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North America as a continent has vast disparities.
One of the main factors is distance in logistics.
It takes longer to ship from East/West coast america than it does to/from most of the EU and the UK.
Soldato
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Yes, if you can't be a good example then be a terrible warning
I understand that but surely knowing that the year after next you are doing this again and the rates may have gone down, stayed roughly the same or gone up. Roll the dice. Against that a longer fix also reduces with cost of living salary increases. Inflation actually helps as the mortgage is fixed against inflation for a longer period. As I said before over twenty five years it makes five eights of **** all difference. Your house is still worth more on resale if you want to move on.
For sure. We beta tested our economy in the premise that the "good ol days" would come back. And we'd stop those dirty immigrants taking our jawbs. Seems we might need those immigrants after all
Immigration is at record highs though. As always, isn't as simple as it seems.
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Soldato
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Its an impossible thing to predict.
People tend to be very short termist with mortgages and the numbers of times over the years people have told me I am wrong to take medium/long term fixes.