Mortgage Rate Rises

jaybee said:
Do you think that pausing an additional rate rise now would stop people taking out mortgages or new deals on the basis that we then may have reached peak, and the prediction will be that they will then start to come down slowly? i.e. so people delay and wait.
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Mortgage fixed rates are forward looking so they will start to drop because of this. This will accelerate if the market adjusts from its current 5.5 peak forecast to 5.25. They will fall even further if BOE drop the rate which I think won’t happen until the start of 2024.
 
How much of a bad idea is it to increase the term of my mortgage while rates are high then fix at a lower rate later on when things have calmed down a little?
 
Crizzy said:
How much of a bad idea is it to increase the term of my mortgage while rates are high then fix at a lower rate later on when things have calmed down a little?
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Actually this might be a terrible idea.

If I increase my term by 10 years on a mortgage product that has no ERC I'd only be saving £150 a month. For products with an ERC I'd only be saving £200. This might sound a lot but I'm expecting my payments to go from £800 to £1250ish when my current fix ends.

I'd rather be more frugal and pay the extra £200 than extend the term for 10 more years.
 
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I get the feeling they will never get inflation at 2% in the next decade, there are too many issues.

The IR really needs to be above inflation, it should be like 7% right?
 
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neocon said:
I get the feeling they will never get inflation at 2% in the next decade, there are too many issues.

The IR really needs to be above inflation, it should be like 7% right?
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If you look at how rarely it's been under 2% Vs the interest rate over the same time I think you'd either need to conclude they're not all that serious about 2% or that 7% is way way too aggressive
 
Saw something interesting the othr day, could have been yesterday actually

They were looking at the 70s and the high and sticky inflation and predicted that we may not find this as easy to solve as we think

Its interesting how we seem to do this, forget inflation and how it works.
I have to keep saying to senior people, yes yes we may have got away with flat budgets, low pay rises etc for the last 20 years, because inflation was low.
You cannot expect that trend in periods of inflation.
I mean I literally said to someone very senior who was disagreeing with me, look at it this way, when inflation is 2% and we set a flat budget your asking for 2% efficiency. When inflation is 10% your asking for 10% efficiency with a flat budget and thats basically an impossibility.
Going we always set a flat budget is fine when inflation is low, but its bloody daft when its high as its basically impossible and people will not try due to demotivation.

Good news from my perspective is that all the key drivers I see for inflation are going down. Freight, energy, materials based on wood and oil pricing (plastics, cardboard etc) for example all have leading indicators are for zero or negative inflation.
They, along with wages, are the sorts of costs that ripple quickly through when inflationary so IMO 2024 will be better. May not be super low but to me that are good indicators that we will see a good chunk taken out of inflation.
 
neocon said:
Even if that is true, we exposed to it and that can't be fixed without massive investment.
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Which should be our priority. No more getting held over a barrell (no pun intended..) by the Saudis/Russians.

Everyone says powering the country with renewables is a pipe dream, but it's not if we actually build the infrastructure. Unfortunately there will be countless parties constantly fighting against this as free fuel is not good for the bank balances of oil execs..
 
Jono8 said:
Which should be our priority. No more getting held over a barrell (no pun intended..) by the Saudis/Russians.

Everyone says powering the country with renewables is a pipe dream, but it's not if we actually build the infrastructure. Unfortunately there will be countless parties constantly fighting against this as free fuel is not good for the bank balances of oil execs..
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for the uk it's quiet impossible .. the shear amount of wind turbines and solar never mind the size of battery farms .. the transport of electricity looses loads overhead wires from 1950 ..the cost alone would kill us .. mini nukes reactors are one way to go .. something that easy to clean up after ..
 
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