Mortgage Rate Rises

Richie · 8 Oct 2022 at 15:27

LabR@t said:
Update with actual figure, you do know how average works right?

I guess it depends what period you want to look at:

Mortgage Rate in the United Kingdom averaged 5.60 percent from 1995 until 2022, reaching an all time high of 8.87 percent in September of 1998 and a record low of 3.59 percent in November of 2021.

Average Mortgage Rates 1995-2022

EvilRob · 8 Oct 2022 at 15:27

LabR@t said:
Bank Rate history and data | Bank of England Database

www.bankofengland.co.uk

Average from 1975 to now is 9.21%. and that is boe rate not your mortgage rate which will be higher..

So yer lol

Still lol'ing.

1. You start at the time period interest rates were highest on record for many years and skew your number. Why not go back to 1900 instead of 1975, or start in 1995 as previous poster mentions?
2. You don't prove your assertion that 7% is low to average for mortgage rates, instead you post a "mathematical fact" about bank rates
3. More open to interpretation but even taking your strange evidence at face value I certainly wouldn't call 7% low compared to 9%, particularly when we know how low rates can go

LabR@t · 8 Oct 2022 at 15:29

EvilRob said:
Still lol'ing.

1. You start at the time period interest rates were highest on record for many years and skew your number. Why not go back to 1900 instead of 1975, or start in 1995 as previous poster mentions?
2. You don't prove your assertion that 7% is low to average for mortgage rates, instead you post a "mathematical fact" about bank rates
3. More open to interpretation but even taking your strange evidence at face value I certainly wouldn't call 7% low compared to 9%, particularly when we know how low rates can go

I started where the boe dataset started not cherry picking a time frame,lol.
7 is lower than 9 isn't it?

Also include the list 14 years of crazy low rates so no skewing there then?

413x · 8 Oct 2022 at 15:31

EvilRob said:
Still lol'ing.

1. You start at the time period interest rates were highest on record for many years and skew your number. Why not go back to 1900 instead of 1975, or start in 1995 as previous poster mentions?
2. You don't prove your assertion that 7% is low to average for mortgage rates, instead you post a "mathematical fact" about bank rates
3. More open to interpretation but even taking your strange evidence at face value I certainly wouldn't call 7% low compared to 9%, particularly when we know how low rates can go

Exactly. Just because something is an average doesn't make it a good tool.

Its just another start that can used to prove a point.

Its been said a lot that 7pc is same impact as 15pc 30 years

LabR@t · 8 Oct 2022 at 15:34

413x said:
Exactly. Just because something is an average doesn't make it a good tool.

Its just another start that can used to prove a point.

Its been said a lot that 7pc is same impact as 15pc 30 years

Not denying that, let's hope the assumption it wont go higher is correct then or a lot of you will be screwed

Richie · 8 Oct 2022 at 15:35

LabR@t said:
Not denying that, let's hope the assumption it wont go higher is correct then or a lot of you will be screwed

How very schadenfreude of you.

413x · 8 Oct 2022 at 15:36

LabR@t said:
Not denying that, let's hope the assumption it wont go higher is correct then or a lot of you will be screwed

I think many already will be.
A lot will depend on if this is/isn't the peak.
More.. How long it lasts.
Base rate has a chunk to go up. But gap between the base rate and current mortgages is significant.

Its probably (hopefully) already priced in. But as I've learnt. There are more important metrics for driving mortgage rates.

LabR@t · 8 Oct 2022 at 15:38

Richie said:
How very schadenfreude of you.

I don't want that either I have children that hope to buy a home it helps no-one

mcast123 · 8 Oct 2022 at 15:43

Without any mathematics, everyone has to admit the near zero BoE rates for the past 10 years is very low. My guess is the 25-35 age group is coming to the realization that borrowing money is no longer "free" money.

You've been winning at the casino for years, the house rules just changed, deal with it.

413x · 8 Oct 2022 at 15:56

LabR@t said:
I don't want that either I have children that hope to buy a home it helps no-one

This is what I don't get with a lot of the older generation.
So many seem to want rates to go up. Because they have savings. But screw everyone else. Surely you don't want to screw your kids. Or your kids kids.

If house prices could stop going up it would make everything less sensitive to small rate rises. People could move up ladder and get thier first house easier.

LabR@t · 8 Oct 2022 at 15:58

We need a rate that helps savers and borrowers. Not near zero rates it's not good for the economy they stayed to low for to long.

adam cool dude · 8 Oct 2022 at 16:02

413x said:
This is what I don't get with a lot of the older generation.
So many seem to want rates to go up. Because they have savings. But screw everyone else. Surely you don't want to screw your kids. Or your kids kids.

If house prices could stop going up it would make everything less sensitive to small rate rises. People could move up ladder and get thier first house easier.

We are in the situation we are in because rates stayed low for too long. Houses prices wouldn't have risen so much if rates stabilised sooner after the financial crash. They should have gone up at least 5 years ago but the rich couldn't care less when it is their gravy train.

I am only 36 and want rates to go up. Low rates is only going to increase house prices far more than a high rate.

Both my children will be having massive mortgages if the same happened and low rates remaining the same.

LabR@t · 8 Oct 2022 at 16:05

It's rates had gone up quicker it would have tempered the housing boom that's for sure, now we have lots in house they can't really afford

413x · 8 Oct 2022 at 16:15

Agree. And looks like banks affordability tests were too loose.
We jumped from sub 2pc to 6pc in 6 months.
So obviously testing at 7pc or whatever it was isn't sufficient. And will lead to a lot of pain

stuman · 8 Oct 2022 at 16:17

mcast123 said:
Without any mathematics, everyone has to admit the near zero BoE rates for the past 10 years is very low. My guess is the 25-35 age group is coming to the realization that borrowing money is no longer "free" money.

You've been winning at the casino for years, the house rules just changed, deal with it.

If we are using that analogy, it’s like playing a game of roulette all your life with 37 numbers, then when you stake ALL your savings, they add 50 more numbers.

LabR@t · 8 Oct 2022 at 16:19

stuman said:
If we are using that analogy, it’s like playing a game of roulette all your life with 37 numbers, then when you stake ALL your savings, they add 50 more numbers.

The house always wins in the end

stuman · 8 Oct 2022 at 16:25

LabR@t said:
The house always wins in the end

Of course, to the tune of £147,000 at the current 3% we are paying.

But, surprise, we now want £300,000 - PROFIT

LabR@t · 8 Oct 2022 at 16:32

When you your mortgage out you must have known the rates were at historically low rates and could only ever gone up?

Freakbro · 8 Oct 2022 at 16:36

LabR@t said:
When you your mortgage out you must have known the rates were at historically low rates and could only ever gone up?

Whilst true, there is a world of difference between going up slowly over years with equivalent wage rises and sextupling in a blink of an eye in the middle of a CoL crisis

stuman · 8 Oct 2022 at 16:39

LabR@t said:
When you your mortgage out you must have known the rates were at historically low rates and could only ever gone up?

“Historically low” interest rates, like our current historically high incomes?

Just because it once was - doesn’t mean it is right now.