Caporegime
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or they will just asset strip and pass the bill onto the tax payer when the government has to bail them out
.Mortgage Rate Rises
- Thread starter glenimp617
- Start date
or they will just asset strip and pass the bill onto the tax payer when the government has to bail them out
.Those trickle down economics. I can feel it already.or they will just asset strip and pass the bill onto the tax payer when the government has to bail them out
Feels like some bank ceo peeing down from hit high horse and the commoner being told to be grateful for it.
Bankers will be very disappointed.
Inflation rates falling back will in no way guarantee a fall in rates, if inflation is sat at the banks target of 2% they won’t drop rates you’ll only see that if the rate of inflation and/or the the economy tank.
My bet is on inflation slowly dropping back (not really related in interest rate rises) and the interest rate hovering at or around 5% for some time. Historically inflation at or below 2% doesn’t mean low interest rates.
What you might be missing is 5% may actually cause the economy to tank.
Low interest rates was a kicking the can down the road solution to the 2008 financial crash, it just put off the inevitable and caused asset inflation.
And?
We are where we are, the fact something shouldn't have happened and did doesn't mean there aren't consequences now.
There's no good answer.
Soldato
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You are right, we are where we are now. Following that, causing a recession is a good thing, not a bad thing, we need a recession.
Recessions are how you clear out the bad and unprofitable companies, along with clearing up useless jobs.
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Yeah I mean it's obvious that something that is ultimately "good" generally or in the long term can be "bad" individually or in the short term but I can't begin to think how you assess that we "need" a recession or that there are "useless" jobs waiting to be culled. That sort of talk smells like someone is about to regurgitate a headline or set off on "in my day" etc.
I would however argue it's self evident that for the collective good a period of prolonged house price stagnation or decline would be good but for a lot of people that would also be bad, so that is a real conundrum.
I would however argue it's self evident that for the collective good a period of prolonged house price stagnation or decline would be good but for a lot of people that would also be bad, so that is a real conundrum.
Soldato
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I'm a house owner and wouldn't mind prices stagnating/ falling. I fixed late summer last year at low LTV, so the value of my house doesn't really matter.
Dumb luck on mortgage renewal timing seems to be the biggest risk for most people at the moment.
Unless someone is trading down to a lower value property, or sitting on a pile of heavily mortgaged debt, I'd see a smallish (10-20%) fall as a good thing for most, and particularly young people.
Hoping for a recession seems to be the "burn it all" option.
Having bought in 2020 I wouldn't mind stagnation (fall in real terms)
What would suck for new buyers would be a fall in absolute value to negative equity.
This is bad usually but as SVR is around 8pc you could jump from 1-2pc to 8pc if you bought recently on a 2 year.
Obviously buying on a 2 year isn't great as a ftb. But no one advised me to go for 5 vs 2/3. And many people have no idea!
Exactly this is the thing where many people are pro things that are against their own interests in part because it's become the norm.
The best thing for everyone would be stagnation, house price inflation hits everyone and makes idiots feel well off despite the fact you can only really benefit (other than marginal LTV rate changes) when you die because you need to live somewhere.
Stagnated house prices with inflation under control would make every feel incrementally better off over time.
Will we shoot for it? Will we ****
The best thing for everyone would be stagnation, house price inflation hits everyone and makes idiots feel well off despite the fact you can only really benefit (other than marginal LTV rate changes) when you die because you need to live somewhere.
Stagnated house prices with inflation under control would make every feel incrementally better off over time.
Will we shoot for it? Will we ****
Only ever borrow the minimum you can get away with unless it's to make money. Even then it's often a risk. Fix the interest rates on debts where you are able. Make sure you can keep a roof over your head and pay your bills, everything else is a bonus, you are not owed a "standard of living". Basic stuff but so often I see people who don't follow this.
I moved, borrowed the least I could, fixed the rate for 10 years at which point the mortgage is paid off. The rates were at 300 year lows, they could only drop a couple of percentage points but had the potential to go much higher. Play the odds if you can. The bank would have lent us another £100k+ easily but I'd rather be debt free. Economies and interest rates ebb and flow, always have, timing is everything, and a little dose of luck
I moved, borrowed the least I could, fixed the rate for 10 years at which point the mortgage is paid off. The rates were at 300 year lows, they could only drop a couple of percentage points but had the potential to go much higher. Play the odds if you can. The bank would have lent us another £100k+ easily but I'd rather be debt free. Economies and interest rates ebb and flow, always have, timing is everything, and a little dose of luck
Only ever borrow the minimum you can get away with unless it's to make money. Even then it's often a risk. Fix the interest rates on debts where you are able. Make sure you can keep a roof over your head and pay your bills, everything else is a bonus, you are not owed a "standard of living". Basic stuff but so often I see people who don't follow this.
I moved, borrowed the least I could, fixed the rate for 10 years at which point the mortgage is paid off. The rates were at 300 year lows, they could only drop a couple of percentage points but had the potential to go much higher. Play the odds if you can. The bank would have lent us another £100k+ easily but I'd rather be debt free. Economies and interest rates ebb and flow, always have, timing is everything, and a little dose of luck
Yea pretty much how we live as well.
I think you'd be mad not to, I think a lot of people are going to suffer pretty hard in the next few years for doing the opposite.
Indeed and it's not just the "poor" people. I know of people who earn substantially more than me but have considerable debts. On the face of it they look very successful but it won't take too much to push them over the edge. If you look at the national figures for mortgage debt, unsecured loans, credit cards and the very low level of savings I think the next government could be presiding over some tough times for quite a few million people. Short of a huge debt write off I can't see it being easily resolved. There is historical precedence for this, sovereigns used to decree debt be written off and the lenders would have to take a haircut. I can't see that happening now, although mass bankruptcy would get us to the same place.
Thats all groovy.. what if you live in a place where you have to max yourself just to have your own house?
Or what if you have an income that means by extension you have to max out to get your own house?
Honestly this "I did the smart thing" is incredibly tedious to the point of being arrogant.
I don't think some people realise that what having money really buys you is choices.
Or what if you have an income that means by extension you have to max out to get your own house?
Honestly this "I did the smart thing" is incredibly tedious to the point of being arrogant.
I don't think some people realise that what having money really buys you is choices.
Soldato
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Most people also can't clear a mortgage in 10 years!
I'm doing pretty well and am on track to pay my mortgage down etc, but I'd struggle moving up to a larger/more expensive house in this market.
I'm only doing well because I was prudent when I was younger so saved up for a deposit, and have been on the housing ladder for a decade, a time which has seen a good rate of house price growth.
If I was newly trying to buy now, would definitely have to stretch the budget to do it.
I'm doing pretty well and am on track to pay my mortgage down etc, but I'd struggle moving up to a larger/more expensive house in this market.
I'm only doing well because I was prudent when I was younger so saved up for a deposit, and have been on the housing ladder for a decade, a time which has seen a good rate of house price growth.
If I was newly trying to buy now, would definitely have to stretch the budget to do it.
And sell a kidney!