Please provide your workings.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Please provide your workings.
He's not a million miles off
When you adjust for "Relative Affordability" (this is a means of adjusting for a number of things, including income to house price ratio, % of take home pay spent on an equivalent mortgage etc), it looks a bit like this
Thankfully, markets are pricing in an assumption of ~4.25% base rate peak now. Not the 6% all the panic people were shouting about before
Still more expensive, but far healthier for the Economy as an interest rate in general
@Alex_6n2
I will take that graph at face value although it is not explained as to their methodology.
In the good old bad old nineteen eighties, we paid more tax, food prices were relatively higher as was fuel. The welfare state was in its relative infancy with very few benefits seen as essentials today, particularly in work benefits which apart from child benefit were practically nil. Food banks, you must be joking.
Yes a 4.25% base rate could come down a bit but it is not unreasonable to expect a return on investments above inflation when that returns to a more normal 2-3% in the future.
I will take that graph at face value although it is not explained as to their methodology.
In the good old bad old nineteen eighties, we paid more tax, food prices were relatively higher as was fuel. The welfare state was in its relative infancy with very few benefits seen as essentials today, particularly in work benefits which apart from child benefit were practically nil. Food banks, you must be joking.
Yes a 4.25% base rate could come down a bit but it is not unreasonable to expect a return on investments above inflation when that returns to a more normal 2-3% in the future.
Soldato
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6%! Thats the letter I received today. Only just paid off some capital to reduce the repayments and lo and behold up it goes again! Got an investment maturing in a week or so so thats where its going mortgage rates are far higher than any returns elsewhere right now.
I think one easy way to conceptualise why it’s so much more impactful is house prices vs wages now and then. So much more of your salary is required to pay your mortgage that small interest rate swings are much more impactful eating into your earnings than they were in the 80s.
I didin’t realise that 2p Lee was actually a member here? Are you going to tell us how to cook for a family of four for a month for 25p a meal next?
All those in work benefits are part of the reason that a 6% interest rate is much tougher than it was even 15-20 years ago. Wages in the UK simply haven’t kept pace with house prices and the main thing interest hits people on is mortgages which are now so large that even a tiny increase can add hundreds to not massive loans. If wages had kept pace with the real cost of living then you wouldn’t need government subsidising businesses to employ people.
Soldato
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times are hard and the country is being run into the ground.... the cost of living increases are a disgrace and not all of them were inevitable imo.
however personal digs at people for stating objective facts also don't help. this notion that someone is saying something which I don't like so I will ridicule them or alternatively attack them to get the shut down.
the poster you quoted is correct. a significant number of people ARE crap with finances and refuse to take responsibility. 10 years on i still get phonecalls every few months regarding my ex lodger who got himself up to his armpits in debt (funnily enough I got one yesterday ) it still didn't stop him always having designer clothes, only eating big brandname foods.and buying a £2000 TV (on credit of course). (we were using my 28 inch crt it was fine)
so sure, blame the government, blame covid, blame Putin......... but equally some people.need to take some personal responsibility as well... Now you may disagree with that , which is ok but that should not give anyone the right to attack anyone who dares to say it
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Deleted User 298457
Deleted User 298457
Some people have realised life is too short. Rather gamble a live fast, die young - or live fast, live on the state - than live a mediocre existence. After all, debt is just a number on someone elses spreadsheet. Your human existence doesn't need to be dictated by this human constructed framework of control to deliver wealth to the wealthy. Our social support systems have made the risk pretty much nill.
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Blame a society built on debt that allows a vulnerable person to time and again run up an excessive debt that they can’t afford? Yes there is an element of personal responsibility but the credit market in this country has been built on ripping off the most vulnerable and trapping them in a cycle of unaffordable debt for years. Once again you only have to look at the proliferation of in work benefits to see how the working poor have been given then thin end of the stick for a generation. Do you have actual numbers for these people that are only poor because they are bad at budgeting?
The blanket ‘budget better’ response is also incredibly insulting to the significant number of people in this country who work hard and scrape by and are now choosing between heating and food. Expecting people to take a huge drop in living standards in a very short period of time and not complain is ridiculously unfair especially when they see the rich getting richer all the time.
This is a really good summing up of my thoughts on the blame the poor mantra that seems to be acceptable to some people. https://tribunemag.co.uk/2022/05/poverty-foodbanks-cost-of-living-lee-anderson-eustice
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Deleted User 298457
Deleted User 298457
Food bank stats are a cop out. The proliferation in the use of food banks is directly proportionate to the number of food banks existing. People who see no stigma in using food banks will always use food banks, because it is free food.
Your claim that 4% now would have been equivalent to 20% then is another escalation of a well worn claim. First it was 8% then 10% then 15% and now 20%. There probably is an answer but not as simple as you and others make out.
We were poorer back in the day, I could not afford a car and had a ratty old Honda 90 step thru to get to work 20 miles away. We rented a TV, did not go out most weeks and could not have annual holidays.
Inflation will inevitably come down, fuel prices not so much as current thinking is hydrocarbons bad.
I also burnt my credit card in 1983 and did not get another. Both to avoid the credit trap.
So your one take away from my post is food bank use and you are basically saying everyone who uses a food bank is doing it through choice to save a few quid? Let me guess if the poor can’t afford bread then they should eat cake?
I never put a number on it but plenty of experts have said that comparing rates historically is a nonsense because of the size of mortgages and the relative amount of take home pay spent on accommodation.
Thanks for your story about being poor, do you think the poor today all have several cars and go to Bermuda in the summer and the alps for Christmas?
Soldato
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I am certainly not making blanket statements. the very fact that food banks need to exist in what is meant to be a 1st world country is offensive. some people absolutely need more help.
but equally *some* people do need a reality check and I don't think acknowledging this is a bad thing. indeed I think ignoring it and lambasting those who bring it up will only reinforce the notion for those who do it that it is ok to run up huge dent buying shiny tat which you don't really need.
some people need help. others need a wake up call.
PS i openly admit i am now more fortunate than most. it's not always been that way however and I am still today just as careful with value for money and minimising waste.... I am appalled at seeing the amount of cash both my friends and colleagues waste on a daily basis. (and it's not that I am tight either)
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Deleted User 298457
Deleted User 298457
Not at all, I agree with basically everything you said. I just believe food bank stats dilute the messaging.
Deleted User 298457
Deleted User 298457
Poor people have it rough but the biggest debt trap IMO is cars with a 'marketed' 3 year shelf life. The industry is the absolute pits of society.
So how many people need this ‘wake up call’ if you are so convinced it is a serious number then surely there is lots of well researched evidence to support the accusation? I’m not saying there are none but if the numbers are significant there will be serious research articles out there to support it not just people feels, articles in the daily mail or comments from low rent politicians.
There is plenty to support the fact that food bank usage is primarily driven by people not being able to afford food, and knowing people who refer families to food banks the social stigma is huge.
Understanding the post-2010 increase in food bank use in England: new quasi-experimental analysis of the role of welfare policy - BMC Public Health
Background The number of food banks (charitable outlets of emergency food parcels) and the volume of food distributed by them increased multi-fold in the United Kingdom (UK) since 2010. The overwhelming majority of users of food banks are severely food insecure. Since food insecurity implies a...
bmcpublichealth.biomedcentral.com
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Santanders 5yr fixed came down this week, it's now less than their 2yr tracker
I said poorer not poor. But yes plenty of younger people that I know tend to forget that things can get worse and ski in winter, get sun in summer. Eat take out more often than cook. That's 2023.
Most people today are not poor, a very few are and by and large are helped by the welfare state.