Interest rate doubled (increased by the least it realistically could have)

Dis86 · 2 Nov 2017 at 22:11

Stretch said:
To a first time buyer. Lucky chap.

Yes. He's only owned property outside of the UK or rented.

Stretch · 2 Nov 2017 at 22:30

Moses said:
I linked you to the source when I made the claim . And yes, a quarter is a significant proportion, but not all of them are homes over £330k/£300k/whatever... a chunk will be between £250k (not 250k mortgage btw) and £300/330k. But you're the one making the claim so I thought you might have evidence. If not just say and we can stop this pointless exercise..

The source shows average price per region. 25-30% of the country lives in London and the South East.

The evidence i have is the evidence you provided.

danielanthony · 2 Nov 2017 at 22:31

Got a new mortgage deal on Monday, 5 years @ 1.94% :cool:

helpimcrap · 2 Nov 2017 at 23:11

At least my savings will increase? Won't they?

Stretch · 2 Nov 2017 at 23:30

Moses said:
Where the south east was an average 276k price with a 50k deposit... so £220k mortgage. Not £300k. That evidence?

So you think in an area with average first time buyer mortgages of £220k, there won't be significant numbers with mortgages of £300k upwards?

If not, we'll have to agree to disagree.

Stretch · 2 Nov 2017 at 23:41

Moses said:
I'm just waiting for your evidence.

It would be statistical anomaly of absurd proportions.

Doogles · 2 Nov 2017 at 23:45

Robzere31 said:
Maybe, but the first rule of borrowing is don't borrow more than you can afford to pay back.
Living on credit has never been a good idea. Sure we all use credit but it's how you manage it that's most important.

I go with never borrow, if I get a broken leg I won't be able to work! Save for what you want or go without, not even a mortgage is worth having imo.

Stretch · 2 Nov 2017 at 23:57

Moses said:
You need to furnish us with facts, not assertions. It's pretty simple.

You know the facts

You don't need to prove the back of your hand is the same colour as the front.

Mysterae_ · 2 Nov 2017 at 23:58

I'm going to ask what may be a few silly questions - who does the money from the mortgage interest rate rises go to? As the government decides on the rise, do they get a cut? Or is it a mixture of the bank themselves and those with savings? Is the governments only involvement the need to control inflation?

In my brief googling, I couldn't find an answer but I was surprised that the Monetary Policy Committee say it takes about two years for a change in interest rates to have its full effect on inflation.

Stretch · 3 Nov 2017 at 00:01

Mysterae_ said:
I'm going to ask what may be a few silly questions - who does the money from the mortgage interest rate rises go to? As the government decides on the rise, do they get a cut? Or is it a mixture of the bank themselves and those with savings? Is the governments only involvement the need to control inflation?

In my brief googling, I couldn't find an answer but I was surprised that the Monetary Policy Committee say it takes about two years for a change in interest rates to have its full effect on inflation.

It goes to the bank. Then they need to give it to the people they borrowed the money from, then again.. and so on.

The BoE do lend money on a last lender basis, but they don't take a cut of general lending.

LOAM · 3 Nov 2017 at 00:04

I read that 50% of mortgage owners (4.5 million of them) have never experienced a rate rise, so congratulations on the new experience.

We are hoping to have ours cleared in 4 years time, I sense an epic crash looming.

dowie · 3 Nov 2017 at 00:04

Overlag said:
for savers its good.

but why is it good in general? I mean 10% would be good for savers too no? Why 6-7% specifically?

Uther · 3 Nov 2017 at 00:09

LOAM said:
I read that 50% of mortgage owners (4.5 million of them) have never experienced a rate rise, so congratulations on the new experience.

We are hoping to have ours cleared in 4 years time, I sense an epic crash looming.

With brexit uncertainty and a totally incompetent government I wouldn't be at all surprised. There's going to be a very rough ride ahead for a lot of people.

Stretch · 3 Nov 2017 at 00:11

LOAM said:
I read that 50% of mortgage owners (4.5 million of them) have never experienced a rate rise, so congratulations on the new experience.

We are hoping to have ours cleared in 4 years time, I sense an epic crash looming.

They are going to have to move very carefully. I think Carney should have put more emphasis on the rate change being a reversal of the drop last year because the immediate threat had subsided.

The rise is clearly due to inflation induced by the drop in stirling. Not "strong" economic data.

dowie · 3 Nov 2017 at 00:11

LOAM said:
I read that 50% of mortgage owners (4.5 million of them) have never experienced a rate rise, so congratulations on the new experience.

We are hoping to have ours cleared in 4 years time, I sense an epic crash looming.

well plenty of those 4.5 million have experienced a rate cut, essentially the rate has just gone back to what it was when they took out the mortgage... no biggie

Stretch · 3 Nov 2017 at 00:15

dowie said:
well plenty of those 4.5 million have experienced a rate cut, essentially the rate has just gone back to what it was when they took out the mortgage... no biggie

The biggest problem is fear. Many people will see this as an indication of further rate rises, and Carney didn't exactly play that down earlier by saying expect another two rate rises over the next three years.

You get the feeling he was trying to maximise the impact of todays rise, whilst avoiding mass panic.

LOAM · 3 Nov 2017 at 00:17

dowie said:
well plenty of those 4.5 million have experienced a rate cut, essentially the rate has just gone back to what it was when they took out the mortgage... no biggie

I think the issue is that its expected to go up further in the coming year. I've said before, I know people who will lose everything if it rises by 2%, the bubble has been formed we're just waiting for the pin.

Stretch · 3 Nov 2017 at 00:25

LOAM said:
I think the issue is that its expected to go up further in the coming year. I've said before, I know people who will lose everything if it rises by 2%, the bubble has been formed we're just waiting for the pin.

I very much doubt we'll see anything more than another 0.25% in the next 5 years.

If we get a really good Brexit deal, the pound will jump and the inflation danger drops. If we get a bad deal it spells trouble, and we won't see a rate rise with that hanging over the economy.

Having said that, 2% sounds like playing with fire.

Sasahara · 3 Nov 2017 at 00:26

MadMossy said:
Those figures are depressing to look at. Not much chance of me ever owning my own place.

Get multiple partners, 4-5 adult will be able to afford one.

dowie · 3 Nov 2017 at 00:27

Stretch said:
The biggest problem is fear. Many people will see this as an indication of further rate rises, and Carney didn't exactly play that down earlier by saying expect another two rate rises over the next three years.

You get the feeling he was trying to maximise the impact of todays rise, whilst avoiding mass panic.

I think he basically did play it down, the markets certainly seemed to interpret the MPC minutes as being dovish and so GBPUSD took a hit in spite of the rise in rates