Mortgage Rate Rises

gingergundog · 23 Mar 2023 at 20:05

Minstadave said:
You may be better off saving and earning interest rather than overpaying with such a low interest rate. Depends on your circumstances but you can get 3% in an instant access saver or similar in an ISA.

That's a very good point actually.

Pottsey · 23 Mar 2023 at 20:14

CapitalOne said:
Tax code isn’t broken and the tax I’ve been paying is correct

Isn't 0T an emergency tax code often from when some of your information is missing. So they charge you full on tax on everything with no 12k personal allowance. I only just got off emergency tax myself this month. 0T should be a temporary emergency tax that depending on why you are on it you often have to be pro active to get off it.

CapitalOne · 23 Mar 2023 at 20:20

Pottsey said:
Isn't 0T an emergency tax code often from when some of your information is missing. So they charge you full on tax on everything with no 12k personal allowance. I only just got off emergency tax myself this month. 0T should be a temporary emergency tax that depending on why you are on it you often have to be pro active to get off it.

It can mean that, it can also mean you are above the threshold for a personal allowance. I know 0L would be more meaningful but that’s apparently too sensible for HMRC!

gingergundog · 23 Mar 2023 at 21:09

fez said:
Unfortunately our mortgage is up for renewal at the end of this year and I can't see rates dropping that much before then. We want to move into a bigger house but currently we seem to be in a weird place where house prices haven't really dropped but mortgage rates have more than doubled.

Hoping that people accept that they house isn't worth what is was and we can offset the higher mortgage cost by getting a discount on the house we want. Don't know how likely this is on houses around £1m though.

Maybe move further afield? TW has always been expensive, although I don't know the prices of the surrounding areas.

Richie · 23 Mar 2023 at 21:11

Goksly said:
Before you can kick off you need to understand how the money has been earnt. If that was all PAYE then yeah he'd pay the same tax. Loop holes won't be closed because people will just shift their location to another country.

Well I guess that's alright then, how dare us plebs take the hump over tax avoidance schemes...

Hagar · 23 Mar 2023 at 21:51

Richie said:
Well I guess that's alright then, how dare us plebs take the hump over tax avoidance schemes...

Many plebs are doing their tax avoidence now that interest rates have reached sensible levels. Speaking to the women organising my ISA recently they have been snowed under with people taking them up.

fez · 23 Mar 2023 at 21:52

gingergundog said:
Maybe move further afield? TW has always been expensive, although I don't know the prices of the surrounding areas.

Oh yeah, we could get a lot more for our money if we went even a short distance but we are just about to have twins so don't really want to move out into the sticks or away from friends now. There are quite a few perks of being in a nice area and within walking distance of a town.

flibbage0 · 23 Mar 2023 at 22:08

Why is the Bank of England so reluctant to raise interest rates? When they do it's tiny little steps. It's not reducing inflation and it's not benefiting those that want to hop onto the property ladder as house prices are not falling by much at all.

By contrast look at USA, more aggressive interest rate hikes, this has slowed down inflation (maybe there are other reasons?) House prices have fallen by 11% on average.

I'm guessing the UK Government are too scared because almost the entire UK economy relies heavily on investment banking and property. I'm guessing all of those in power have a considerable property portfolio and will do anything in their power to reduce the chances of property prices falling sharply.

a1ex2001 · 23 Mar 2023 at 22:13

flibbage0 said:
Why is the Bank of England so reluctant to raise interest rates? When they do it's tiny little steps. It's not reducing inflation and it's not benefiting those that want to hop onto the property ladder as house prices are not falling by much at all.

By contrast look at USA, more aggressive interest rate hikes, this has slowed down inflation (maybe there are other reasons?) House prices have fallen by 11% on average.

I'm guessing the UK Government are too scared because almost the entire UK economy relies heavily on investment banking and property. I'm guessing all of those in power have a considerable property portfolio and will do anything in their power to reduce the chances of property prices falling sharply.

Because our current inflation problems have very little to do with interest rates. Fuel/energy and food prices are what is driving our inflation all putting interest rates up much higher will do is cause mortgage misery for millions.

Simon · 23 Mar 2023 at 22:14

4.25 v 5. Hardly a huge difference. You talk like US is double !

flibbage0 · 23 Mar 2023 at 22:17

Simon said:
4.25 v 5. Hardly a huge difference. You talk like US is double !

Then why don't the UK raise the interest rate by 0.75% if it's not much of a difference?

Also how come US house prices have dropped by 11%

Simon · 23 Mar 2023 at 22:26

‘Much more aggressive’ is now ‘not much of a difference’ Make your mind up

I guess they dropped cause they did and is that a good thing ? If it isn’t then I guess that explains why uk didn’t raise as much. Also since when was us way of living relevant to uk? House taxes are ridiculous there for a start

dlockers · 23 Mar 2023 at 22:27

flibbage0 said:
Also how come US house prices have dropped by 11%

Why is the US relevant at all?

grudas · 23 Mar 2023 at 22:39

flibbage0 said:
Then why don't the UK raise the interest rate by 0.75% if it's not much of a difference?

Also how come US house prices have dropped by 11%

I know uk and rest of the world like to align to USA… but things like property prices are irrelevant.

flibbage0 · 23 Mar 2023 at 22:39

dLockers said:
Why is the US relevant at all?

Because it is the biggest economy in the world and a majority of trade deals are done in USD, Oil etc. It's the reason why the USA can be in debt, because it's done in their own currency.

flibbage0 · 23 Mar 2023 at 22:46

Simon said:
‘Much more aggressive’ is now ‘not much of a difference’ Make your mind up

I guess they dropped cause they did and is that a good thing ? If it isn’t then I guess that explains why uk didn’t raise as much. Also since when was us way of living relevant to uk? House taxes are ridiculous there for a start

The rate of increase over the last 12 months was a lot more quicker, that is what affects confidence of the average consumer. https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

Now look at the rate at which the Bank of England increased interest rates over the last 12 months

You might say well 4.25% vs 5.25% it's not that much, but how many of us on a recently obtained mortgage would be alright with 1-1.25% on top of our current rate?

Simon · 23 Mar 2023 at 22:51

Are you aware of US property tax compared to uk council tax ?

Simon · 23 Mar 2023 at 22:51

flibbage0 said:
Because it is the biggest economy in the world and a majority of trade deals are done in USD, Oil etc. It's the reason why the USA can be in debt, because it's done in their own currency.

And? What’s that go to do with the price of bread ? The US is lots of different states with very different economies and taxation levels. I am gonna guess the 11% drop is not evenly distributed across the country ?

kai · 24 Mar 2023 at 08:04

fez said:
Huh?? How does this work. Have you just taken a load of money out of the value of the house?

gingergundog said:
From Home and Garden I think @kai was planning on an extension.

Correct, i am borrowing an extra £160K for an extension. I had just under 25K left, and the plan was to be mortgage free this year at 35. Back to 20 yrs, with the aim to pay in 10 or less with 10% over payment lump sums each year under the fixed.

BUDFORCE · 24 Mar 2023 at 08:10

flibbage0 said:
I'm guessing the UK Government are too scared because almost the entire UK economy relies heavily on investment banking and property. I'm guessing all of those in power have a considerable property portfolio and will do anything in their power to reduce the chances of property prices falling sharply.

Agree with this part.

Maybe not "almost entire" but a good proportion of it, certainly.

We act as a "giant bank" for lots of overseas funds.

That starts to collapse and we got problems.