Mortgage Rate Rises

Briefly saw an article that showed that, when adjusting income, house prices, and other factors for inflation, the "highs" of the mortgages of 11-15% a few decades ago (that a few of the er... older posters here keep reminding us of), were broadly the same financial burden as having a 2% mortgage now :eek:

However, I'm struggling to find it again to give it a proper read.
 
kona786 said:
I remember plenty here were saying base rate wouldn't get to 2% as we'd all default.

As said... No one knows.
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Must be getting I to the territory where we will start getting defaults.
Because of the huge lag in people getting clobbered by this I don't believe the BoE has to go much further. Else the benefits to the rich are going to really start stacking up.

Its sad it takes another shift of wealth to the rich to sort out our problems.

It really doesn't need to go any higher. It just needs to stick around 4-5pc
 
413x said:
Must be getting I to the territory where we will start getting defaults.
Because of the huge lag in people getting clobbered by this I don't believe the BoE has to go much further. Else the benefits to the rich are going to really start stacking up.

Its sad it takes another shift of wealth to the rich to sort out our problems.

It really doesn't need to go any higher. It just needs to stick around 4-5pc
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Yup. 5.5% base rate will certainly see plenty of defaults. Such is life. All we can do is adapt in the end. Resistance is futile as they say.
 
nightwish said:
If the government starts helping home-owners to pay their mortgages, without providing equal or greater assistance to those who do not yet own a home, you're creating an absolute powder-keg of inequality. I don't think any government can afford to go that far politically, never mind financially. Pandering to the middle-England, middle-aged (or older) homeowners keeps the core voters happy, but if you set every middle-aged (or younger) non-homeowner anywhere in the UK against you, I think you're well on your way to losing the next election.
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The reason interest rates have gone up is to try and quash inflation which has remained stubbornly high once you start borrowing to pay peoples mortgages then that simply feeds inflation and you're back to square one. Not to mention all the renters who are paying way above mortgage rates for their properties to start with whose rents are now going thru the roof is the govt going to pay their rents too? Come to that all those who can't afford a large house or mortgage why not just get a mortgage they can't afford and say hey govt pay my mortgage for me! This is a huge political powder keg waiting to explode and it doesn't even depend on who's in govt because the next one will simply inherit the same problem, still I guess they can fend off every question by blaming the previous though because they always do.
 
413x said:
Must be getting I to the territory where we will start getting defaults.
Because of the huge lag in people getting clobbered by this I don't believe the BoE has to go much further. Else the benefits to the rich are going to really start stacking up.

Its sad it takes another shift of wealth to the rich to sort out our problems.

It really doesn't need to go any higher. It just needs to stick around 4-5pc
Click to expand...
I assume there's something I'm not getting that smarter folks than I are.. that exact point like haven't we potentially already boiled the frog with all this? Like for me I'm fixed for another 2 years so this blunt tool can't do anything to me other than trash everything around me.

But I've already got the message lol.. ok ok no more avocados?
 
kona786 said:
Yup. 5.5% base rate will certainly see plenty of defaults. Such is life. All we can do is adapt in the end. Resistance is futile as they say.
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Indeed. Just got to do what you can for yourself and family. Mitigate as much as possible and get used to a lower standard of living.

Maybe keep your phone/tv longer, maybe buy less drinks when out, make clothes last longer etc etc.
 
matt100 said:
I assume there's something I'm not getting that smarter folks than I are.. that exact point like haven't we potentially already boiled the frog with all this? Like for me I'm fixed for another 2 years so this blunt tool can't do anything to me other than trash everything around me.

But I've already got the message lol.. ok ok no more avocados?
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Rates for mortgages only (mainly really) hit renters (mortgage costs passed on, or landlords selling up.. More demand) and people with bigger mortgages/start of mortgage journey.
And also those looking to get on.

So you have a whole load of people who want it... See daily mail. Cash rich, those ready to swoop in and buy the repos.


Then you have the lag to wait to hit the ones it will hit.
People will be on 2-10 year and tracker mortgages. A lot on 2-5 year.

As we've only had these rates a year or so we still have loads of people yet to even be hit. Then you have a lag of these people defaulting. And a further lag for any repos.


So the bad news stories of people losing thier homes will Probably start soon. And ramp up. Spending in this bracket of people will be crippled.

No one wants a recession, but if too many people fall into this pit, job losses will start coming as businesses fold.


So I think it's time to pause the rise-per-meeting agenda we've been on. Because rates of 5pc should be enough to do enough damage
 
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413x said:
Indeed. Just got to do what you can for yourself and family. Mitigate as much as possible and get used to a lower standard of living.

Maybe keep your phone/tv longer, maybe buy less drinks when out, make clothes last longer etc etc.
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Yes.

Though those of the flagrant variety turn to ways of making money that just brings society down as a whole. Things like cuttings corners, creating shoddy items or just plain stealing etc.
 
squerble said:
Briefly saw an article that showed that, when adjusting income, house prices, and other factors for inflation, the "highs" of the mortgages of 11-15% a few decades ago (that a few of the er... older posters here keep reminding us of), were broadly the same financial burden as having a 2% mortgage now :eek:

However, I'm struggling to find it again to give it a proper read.
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You're not imagining it I read/heard the same.
 
squerble said:
Briefly saw an article that showed that, when adjusting income, house prices, and other factors for inflation, the "highs" of the mortgages of 11-15% a few decades ago (that a few of the er... older posters here keep reminding us of), were broadly the same financial burden as having a 2% mortgage now :eek:

However, I'm struggling to find it again to give it a proper read.
Click to expand...
There was a prominent reddit thread at the start of the year along these lines, it felt a bit sensationalist and it was along the lines of if we saw 10+% now it was the equivalent of 40% or something in the 80's - think it was in UkPersonalFinance. Not saying it's right/wrong - just i've seen the thread.
 
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SixTwoSix said:
There was a prominent reddit thread at the start of the year along these lines, it felt a bit sensationalist and it was along the lines of if we saw 10+% now it was the equivalent of 40% or something in the 80's - think it was in UkPersonalFinance. Not saying it's right/wrong - just i've seen the thread.
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10% would be mad. Pretty much no-one who within the last few years bought an average UK home could afford that. Imagine a £250k mortgage, not inconceivable and rather typical due to average house price, £25k a year/£2k a month solely in interest through a year.
 
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kona786 said:
Yes.

Though those of the flagrant variety turn to ways of making money that just brings society down as a whole. Things like cuttings corners, creating shoddy items or just plain stealing etc.
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Problem is if 35% of the population stop spending then it creates more problems.

But the problem are councils, like I said before, those that work in councils think they are big shot financiers.

www.bbc.co.uk

Bankrupt Woking Borough Council scraps affordable homes plan - BBC News

Woking Borough Council halts all spending on non-essential services, with debts set to hit £2.6bn.
www.bbc.co.uk www.bbc.co.uk
 
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