"8% on my colossal £20,000 mortgage!!"
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
"8% on my colossal £20,000 mortgage!!"
My mortgage is currently about £2k a month at 3.09%
It’s an extra £500ish a month for every 1.5% (which is what we’d be paying if we fixed now).
At 6% it would be £3000 a month.
9% would be £4000 a month - ouch!
I can definitely see people being put off moving house (or paying a lot for a house) if rates continue to rise.
It’s an extra £500ish a month for every 1.5% (which is what we’d be paying if we fixed now).
At 6% it would be £3000 a month.
9% would be £4000 a month - ouch!
I can definitely see people being put off moving house (or paying a lot for a house) if rates continue to rise.
Isn't that the plan? 'We' have too much money in our pockets apparently.
Frim what i have heard is developers are either renting out properties or pausing current builds and going out buying land and getting planning until all this craziness gets back to normal!
Soldato
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They will slow down or even mothball sites if it gets difficult rather than simply sell for less.
Can't trust banks with the numbers.
The editors calculations
Average wage in 1980 was ~ £5k knock off 1k for 20% tax, NI etc so ~4k disposable income = ~ 50% of income assuming you can trust any other numbers.
That would make the current 6.5% approx equal to 15% back in the day
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No, but a lot of people moved and would have taken out a mortgage during that period.
Ah yeah I get your point. I think they said 25% of all fixes are ending this year.
I'm on a new build site. They discounted a few houses but only by 25k and they were already 575k but most have sold. Also they changed slightly what type of properties they are building on the site, less flats. I feel like things have slowed with construction of the third and final phase. Pretty much all of phase 2 was social housing, shared ownership, rented or something, so it was not for sale in the usual sense.
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Soldato
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A lot of stuff thats hitting the market right now may well have been sold off plan, or deals were done before things got mental. There's a lot of in flight construction jobs that will finish, but it's going to be a challenging time. A lot of jobs that were planned - but not yet started will not commence in the current circumstances. Jobs where the building is 30m+ are currently facing challenges as well due to the second staircase rules that have come in (building need to be redesigned and planning needs dealing with again).
The Gov could do stuff without working against the BOE policies, if they could pull down energy and food costs it would help. But there's no overnight fix - would be 6 months plus to feel the effects, probably more.
- Do something more to assist National Grid getting renewables online, there's currently a huge backlog for grid connections for new projects. This'll help bring energy prices down a little.
- Do a couple of huge infrastructure projects to build some massive pumped storage systems to make renewables more effective.
- Make farmers lives easier, they are going to be screwed on their borrowing this year (takes a lot of up front costs to get crops in the ground, and equipment isn't cheap either) - and they get screwed by the supermarkets as well. It's just a mess at the minute, it's to hard to make a living being a farmer if your not huge - making things easier will help increase food supply. The new green payments the gov are going to be doing don't do enough to encourage/help with food production.
Doubt Conservatives will do anything though - I think they should go for it now, as they must know they are likely to lose the next GE, so they could do the above and let Labour worry about how to pay for it. The biggest borrower for BOE is the government - so the base rate being high will make the possibility of the government doing anything major very expensive anyway.
Soldato
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The objective is to stop people spending. So the same could be achieved, probably faster, by lifting certain taxes. For example vat, fuel, income tax. This would also enable better targeting so the less well off suffer less.
It's terrible government putting all this on the BoE and making mortgage holders take all the pain.
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Associate
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Not sure I agree with that. Most banks are offering interest rates a few percent higher than a couple of years ago. Premium bond IR is the highest it has been for over ten years.
Clearly the IRs do not match that of mortgages but the difference is how banks make their money.
I have a solution take out a mortgage for that mortgage. It should workout lol.
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those people haven't taken out 100% loans (they have some deposit) so that's inaccurate.Can't trust banks with the numbers.
The editors calculations
Average wage in 1980 was ~ £5k knock off 1k for 20% tax, NI etc so ~4k disposable income = ~ 50% of income assuming you can trust any other numbers.
That would make the current 6.5% approx equal to 15% back in the day
putting some figures on mortage increase it's average 3% hit on income - for many that will be offset by payrises,
so when you view it in perspective of there needs to be pain and we have to realise we are poorer - it doesn't seem outlandish
The Macroeconomic Policy Outlook Q2 2023 • Resolution Foundation
www.resolutionfoundation.org
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are credit card rates going up ? haven't seen any discussion on that
I find it annoying people keep saying its only mortgage payers, the majority of LLs who pay a mortgage will pass this on to their tenants (at least some of it). This isnt aimed at you specifically, but I would say it affects anyone who isnt a social housing tenant, or doesnt outright own their home.
In terms of the spending, I still have the view its not going to work (it will appear to work when inflation goes down for other reasons). Purely because most of whats fuelling inflation is basic cost of living, essentially the way to reduce demand on essentials is to starve, turn your lights off, and stop paying your rent/mortgage.
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Caporegime
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stop spending money on food, water and a roof over our heads?