Energy Prices (Strictly NO referrals!)
- Thread starter DXP55
- Start date
Awesome thanks, thats not too bad then, even with 2 of us at it, thats still only what, 25 a month or so for gaming. Pretty decent considering how much entertainment we get from it. Ok, thats not as bad as I thought
Interesting that you mention you're with eon, I've spent the entire day with them trying to explain to them that they've ****** up our readings. According to them we've used ~4500 (day only) since november because they've decided to take an estimated reading when we were switch over from symbion ~4000 lower than the numbers symbion gave them and they are struggling to see what the problem is.
In addition to this, I remembered my sister was also having very high usage electricity bills recently which she'd been trying to get to the bottom of - turns out she's also with eon.
Unless you're in debt higher interest rates are a good thing. Even a small amount of money in savings yields returns whereas things like rent remain at a fixed rate so you end up better off.
Soldato
True
Just so we're clear.
My current interest rate is 1.2%. If it were to jump to 12% the repayment would be ~3x, not a 10x jump some people have in their heads.
You say that as if a tripling of mortgage payments wouldn't be devastating to many, even most, people.
Ofcoruse it would be. The housing market is ridiculous forcing many people to live outside their means.
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Soldato
Yeah tbh the lower the interest rates remain the better off I would be every month. Managed to remortgage end of Jan at 1.69% for 5yr up from the 1.2% for 2yr I had previous so wasn't awful. Like £355 to £375 a month by preparing 3 months early for these price hikes being discussed even back then.
I should have cancelled my energy deal (was no fee) and redone that at same time tbh though. But now just remaining on variable and hoping.
I should have cancelled my energy deal (was no fee) and redone that at same time tbh though. But now just remaining on variable and hoping.
Soldato
- Joined
- 27 Mar 2013
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Thinking about it rent would like shoot up too as I guess most landlords have a mortgage, although not sure how that works from a contract perspective.
Soldato
Apologies, I realise this. I was wondering if @Freakbro and @Uther would come back to explain their reasoning why they not only want the rates up but appear to be giddy about them getting to 10%.
Usually its down to 1 or more of a few reasons (no mortgage, big savings, looking for a House Price Crash)... I was just interested in their reasons given their apparent reactions (which I realise can be misinterpreted in written form)
Soldato
Some landlords will have RPI increases built into their contracts so could easily increase rates by that although they then have to balance keeping/finding renters if they outprice themselves.
Soldato
People should have been stress tested to 6-7% if they took a mortgage since 2014(?) so people should be able to afford it within reason
Being able to afford it could mean literally only just being able to survive, literally nothing other than basic food, low heating etc, but thats not the mortgage companies problem.
I think something around this level would hurt a lot.
Considering inflation, its quite possible that there has been a % or two knocked off that affordability % for some people.
People also forget however that inflation reduces debt in real terms every year. Say you have a £1000 mortgage, if inflation is 2% in real terms assuming you do get inflationary rises then you mortgage is 2% cheaper each year (Year one £20, year two a little more). Not in cash terms, but in real terms.
Sorry, I saw your notification yesterday but was out till early hours.
As you realise, the simple answer is because it benefits us. No/low debt and plenty of savings to get a return on. Uther especially, as he has now been forced into early retirement due to Covid, so a greater proportion of income would come from higher interest rates.
But for some reason, that there are some people who would benefit from high interest rates rather than virtually zero ones, seems to upset some people!
Soldato
Just balance.
Roughly 1/3 have mortgages, 1/3 renting and 1/3 with no rent/mortgage.
So by default 2/3 see higher rates as higher bills and don't want it.
The 1/3, many of whom are older and less able to increase income have seen returns plummet on savings, which has forced some into poverty. They were deemed expendable to support the 2/3.
We are well stress tested against rate rises, and we made sure to do the sums before taking out the mortgage.
They were just about to hit the interest rate increase button just before covid it 2 years ago so this really shouldn’t come as a surprise to a anyone. There is only so long you can go at sub 1% rates with huge levels of quantitative easing (printing money to pump the economy) that was happening since the Brexit vote (consequently wasn’t happening elsewhere unlike during COVID) and not cause problems.
We have been well below ‘normal’ rates since 2008 and it’s going to be a shock for some people but the warning has been in huge bold print in the documentation for years.
They were just about to hit the interest rate increase button just before covid it 2 years ago so this really shouldn’t come as a surprise to a anyone. There is only so long you can go at sub 1% rates with huge levels of quantitative easing (printing money to pump the economy) that was happening since the Brexit vote (consequently wasn’t happening elsewhere unlike during COVID) and not cause problems.
We have been well below ‘normal’ rates since 2008 and it’s going to be a shock for some people but the warning has been in huge bold print in the documentation for years.
Soldato
Agree @b0rn2sk8 but lets hope the governments actually innovate and help the people as they turn the screw. I cant believe they commit to these carbon zero agreements etc. but dont present any schemes to get this ball rolling.
Man of Honour
This is where fixed rates become significantly beneficial. I think for people that invest for their pensions high interest rates are going to be really helpful potentially, but any short term debts and variable rate loans are going to be quite painful. Unfortunately the timing sucks, but it's probably right for interest rates to come back up... but I fear it's going to need a bit of resetting in terms of financial behaviours which is going to shake things up.
But inflation only really benefits if it affects your wages ?
If you don't get that inflationary pay increase and everything goes up around you that debt is still just as big as it was. (at a personal level)
I think stress testing to 7 and is personally correct. But I have low costs. And I'd still be against the wall. It would be a miserable (by my past standards) way to live.
I don't think it will get anywhere near that. If it does. Well. The whole market will come crashing down.
I've got the difficult decision this weekend to grab probably the last of the sub 2pc fixes but pay 2k ERC
I find this quite stressful as it is significant.
People are telling me not to jump now and wait for my fix to end. But I'm not so sure.
Last week I thought I should ride it out. But keep reading about 2+ percent forecasts as a minimum now.
If rates go anywhere near 2 percent its absolutely right to jump now.
But if they only stay at 2 pc for 6 months. Its better to wait.
It's very very hard to Forecast even a year forwards at the moment.