That's madness! I'm paying 2.54% on a £85k mortgage, it would go up by £91 a month with a 2% increase, not great but easily doable. First time buyer on my own. I'd never take out a mortgage if a 2% rise literally meant you lost everything!
Interest rate doubled (increased by the least it realistically could have)
- Thread starter LabR@t
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That's madness! I'm paying 2.54% on a £85k mortgage, it would go up by £91 a month with a 2% increase, not great but easily doable. First time buyer on my own. I'd never take out a mortgage if a 2% rise literally meant you lost everything!
Associate
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But many mortgages are for double that, so nearly £200 a month. That's a much bigger impact.
Caporegime
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It's quite alarming how many people are now worried they can't afford their mortgage off the back of a 0.25% rise. How shortsighted and naive you must be to have taken a mortgage out at 0.25% thinking it would last
As for me, I'm going to try and remortgage a few months early, luckily I got my mortgage when the rate was at 0.5% anyway so if I can get locked in now on another 2-5 year deal, I shouldn't be paying too much more
I just did the same, 5 year fixed last month at 1.8% iirc. Seemed to be sensible to lock in for a decent time.
But then the bank must know better than me, so I’m probably getting the shaft whatever I do.
That's the thing, many first time buyers in London are extremely wealthy and have either come from abroad, rented or have lived at home elsewhere.
One of my clients is the (middle aged) son of a prince over in Saudi. His 'first time buy' was a £6m property. Which, for the record, hes never set foot in. We have 500 clients on our books, 60% of whom I'd estimate are in London and many of them are 'first time buyer's' doing similar things to this guy.
Soldato
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When taking a mortgage out you should AT LEAST factor in a 2% rate rise. You seriously telling me, people took mortgages out at silly low rates and will lose their house because of 2%? If so, they should have bought a cheaper house.
1st rule of life - people are dumb
I didn't think it has been possible for a number of years to take out a mortgage at such a level that would leave you in trouble come an interest rise. Think we fixed when it was about 2.5% but were stress tested to about 4.5-5%, even then we didn't take the max amount.
Soldato
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Yeah that's good, but there are those people who after taking a mortgage out get loans, credit cards, car leases etc etc meaning a rate rise could really cause them trouble.
It's irritating the way the media and a lot of people are reacting to this.
"Interest rate HIKE" - Really? 0.25% back to where it was a year ago?
"How will the markets react?!?!" - They won't, this has been known about for weeks and is already accounted for. The Bank of England is not in the business of surprise moves.
Get a grip people of the United Kingdom
"Interest rate HIKE" - Really? 0.25% back to where it was a year ago?
"How will the markets react?!?!" - They won't, this has been known about for weeks and is already accounted for. The Bank of England is not in the business of surprise moves.
Get a grip people of the United Kingdom
True, when I remortgage my house 2 weeks ago. I asked my advisor worse case scenario if the interest rates hit 5%, what would my payments be. Even with 5% I still be overpaying enough to not make an impact on my wages.
Soldato
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a good piece of advice is set to a %, then if the rates fall like they did a few years ago, use the money saved to overpay. That way, if the rates shoot up, you just use the money you were using the overpay to just pay the extra
I got a 10 year fixed about a year ago too. Mine is at 3% and had no fees, which present better value than a 2.79% with about 1k fees. That'll see me to the end of my mortgage. Its a small enough amount that i'm not really concerned about small % fluctuations. I simply wanted to avoid worst case scenario of 10%+ rates.
This is the savvy seemingly missing from quite a few folks. Present company excluded of course
I dropped my daughter off at my parents house this morning and first thing my mum mentioned was the interest rate hike and the first ever in 10 years. Due to the way it has been reported it has been made into a big deal, when I mentioned it has only just gone back to what it has been for the last 10 years she couldn't get around the fact it is still the first raise in 10 years!
All this scaremongering and bullcarp reporting etc is going to cause people to slightly panic. Everyone is blaming brexit...if it wasn't for all the media hype things would be fine.
Anything to tarnish the brexit, it will give them ammunition to stall it etc
Soldato
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Get it up to 10% and I can live off my savings interest.
Edit: if, by some miracle, it is passed on in full
Edit: if, by some miracle, it is passed on in full
Soldato
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I've got to say the media are stoking this one. The BBC (a broadcaster you'd expect to take a balanced approach) have led with the slightly provocative tagline of how high could the rates end up going, and then referenced back to historical rates from 20-30 years ago as if the BoE are suddenly going to cripple the average person by whacking the rate up by 15% over the next 2 years.
Agreed, some of the BBC headlines have been really annoying. The press has always been about click bait I suppose, it was just the "please purchase our news paper" equivalent before the internet.
I hope a bigger percentage of the public are capable of drawing their own conclusions than those who are idiots.
I'm with you, but recognise this would be an utter disaster for the majority of the populace. I also acknowledge I'm in a privileged position when compared to most so will swallow the awful 1/2% interest on my fixed term savings for the foreseeable future (10+ years).