Mortgage Rate Rises

Freakbro said:
WTF?, why is wanting what's beneficial for me bad, but other people wanting what's beneficial for them good?

And now wanting to have a decent return is greedy....LOL, I'll go tell everyone that in the investments thread. Wind your neck in Rob :rolleyes:
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You should have been happy with your 000000.1% savings rate for the last 15 years mate. :mad:
 
Freakbro said:
WTF?, why is wanting what's beneficial for me bad, but other people wanting what's beneficial for them good?

And now wanting to have a decent return is greedy....LOL, I'll go tell everyone that in the investments thread. Wind your neck in Rob :rolleyes:
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Because wanting what’s good for you could end up with thousands of people and families on the street when they go under. You’d gladly see interest rates rise to record levels as long as it put an extra few quid in your pocket. Personally, seeing as we’re a society, I prefer to see a more balanced state of affairs where everyone can manage to afford their homes and earn some savings.
 
robfosters said:
Because wanting what’s good for you could end up with thousands of people and families on the street when they go under.
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Hyperbole much, thousands of repossessions have always happened and we have been at some of the lowest rates since the 70's. Even with the increase we have been seeing, we are still at lower rates than pre-pandemic. Current mortgage arrears at the end of '23 is standing at less than 1% of mortgages.

robfosters said:
You’d gladly see interest rates rise to record levels as long as it put an extra few quid in your pocket.
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Really, is that what I said? That I wanted interest rates at nearing 20%? (record levels) Or did I just say that I was happy it would be staying at a historically very modest rate of 5%, which is currently beneficial as it's above inflation. Again, you're a bit excitable this morning.

robfosters said:
Personally, seeing as we’re a society, I prefer to see a more balanced state of affairs where everyone can manage to afford their homes and earn some savings.
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And exceptionally low interest rates for the last 15 years have also caused hurt to every part of society by fueling the house price boom so the people who can get a mortgage have to get a stupidly high one, thus making them vulnerable to economic shocks and excluded another portion of society from being able to afford one in the first place.

But yea, lets just be selfish and only think about the minority of society now actually have a mortgage.
 
It would be nice to reach some equilibrium.
A bit of inflation and no return to ultra low rates. It's clear 0pc base rate was there too long and only made it all the worse when rates spiked.

The amount of debt (corporate, personal, public) is far too high and was only viable with 0pc rates for the foreseeable
 
Freakbro said:
Hyperbole much, thousands of repossessions have always happened and we have been at some of the lowest rates since the 70's. Even with the increase we have been seeing, we are still at lower rates than pre-pandemic. Current mortgage arrears at the end of '23 is standing at less than 1% of mortgages.



Really, is that what I said? That I wanted interest rates at nearing 20%? (record levels) Or did I just say that I was happy it would be staying at a historically very modest rate of 5%, which is currently beneficial as it's above inflation. Again, you're a bit excitable this morning.



And exceptionally low interest rates for the last 15 years have also caused hurt to every part of society by fueling the house price boom so the people who can get a mortgage have to get a stupidly high one, thus making them vulnerable to economic shocks and excluded another portion of society from being able to afford one in the first place.

But yea, lets just be selfish and only think about the minority of society now actually have a mortgage.
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Yeah it's fuelled excessive house price rises. Without those ultralow rates for so long, the recent spike might not be so bad.
 
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413x said:
It would be nice to reach some equilibrium.
A bit of inflation and no return to ultra low rates. It's clear 0pc base rate was there too long and only made it all the worse when rates spiked.

The amount of debt (corporate, personal, public) is far too high and was only viable with 0pc rates for the foreseeable
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I think people including myself in this, have been used to living of free or cheap credit.

I have about 6k of interest free debit at the moment, the cash is there in the bank but while they charging me 0% I'm gaining 5% of intreast from the banks.

Just doing a quick scan, a lot of the banks have reduced the lenght of the credit now, my card was 24 months when I took it out, now new applications are only getting 21 months, IF they pass the credit check.
The longest prevous lenght was I believe 3 years, but it looks like those cards have gone. This is for purchases and not balance transfers, but I won't be suprised for the lenght to drop down to 12 months or 18 months to what it was like a few years ago.
 
slinxy said:
I think people including myself in this, have been used to living of free or cheap credit.

I have about 6k of interest free debit at the moment, the cash is there in the bank but while they charging me 0% I'm gaining 5% of intreast from the banks.
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With all due respect though, and I am not particularly smart, 5% on £6k is like 25 quid a month. The only people benefitting from higher saving rates are losing big time on increased mortgage costs, car costs. The stock market is now underperforming where longer term savers should be going to anyway.

slinxy said:
Just doing a quick scan, a lot of the banks have reduced the lenght of the credit now, my card was 24 months when I took it out, now new applications are only getting 21 months, IF they pass the credit check.
The longest prevous lenght was I believe 3 years, but it looks like those cards have gone. This is for purchases and not balance transfers, but I won't be suprised for the lenght to drop down to 12 months or 18 months to what it was like a few years ago.
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Offers eb and flow all the time. I took a 2 year Klarna agreement the other day and a 3 year PayPal 0% the month before that. The latter was completely unheard of 3 years ago.
 
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Freakbro said:
Good news! That should hopefully stop the pressure on the BoE to cut rates any time soon.
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You keep making comments like this, but persistently high inflation is bad for everyone including you and wipes out most of whatever return you think you're getting on your savings. Your savings will have lost a significant proportion of their spending power through this.
 
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EvilRob said:
You keep making comments like this, but persistently high inflation is bad for everyone including you and wipes out most of whatever return you think you're getting on your savings. Your savings will have lost a significant proportion of their spending power through this.
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Yeah but I made £50 on my 13k so I am rich now
 
dlockers said:
With all due respect though, and I am not particularly smart, 5% on £6k is like 25 quid a month. The only people benefitting from higher saving rates are losing big time on increased mortgage costs, car costs. The stock market is now underperforming where longer term savers should be going to anyway.
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In my particular case;

about 5k of debit are interest free loans for watches. The RRP of the watches have gone up due to inflation, not that I would expect that I would get anything near the RRP for the watches if I was to sell them on, it just would cost me a lot more if I was to purchase them today.

You're forgetting that interest compounds if you don't take it out of the bank..
5k over 4 years at a rate of 4% gives £636.64. Not saying that the rate will be remain at 4% for the whole 4 years, this is just an example.

Inflation eats away at the original cost, so 5k today is worth less than than 5k paid over the four years.
but you can say the same for having the money in the bank.

Running credit and leveraging isn't for everyone, I just reduce the risks by having the money first before taking out the loan.
 
slinxy said:
In my particular case;

about 5k of debit are interest free loans for watches. The RRP of the watches have gone up due to inflation, not that I would expect that I would get anything near the RRP for the watches if I was to sell them on, it just would cost me a lot more if I was to purchase them today.

You're forgetting that interest compounds if you don't take it out of the bank..
5k over 4 years at a rate of 4% gives £636.64. Not saying that the rate will be remain at 4% for the whole 4 years, this is just an example.

Inflation eats away at the original cost, so 5k today is worth less than than 5k paid over the four years.
but you can say the same for having the money in the bank.

Running credit and leveraging isn't for everyone, I just reduce the risks by having the money first before taking out the loan.
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That's my point though - a badly performing market with high inflation means everyone loses - even if it feels great to get 5% on measly savings (in my case). They just benefit low risk boomers who refuse to sell and downsize :)
 
EvilRob said:
You keep making comments like this, but persistently high inflation is bad for everyone including you and wipes out most of whatever return you think you're getting on your savings. Your savings will have lost a significant proportion of their spending power through this.
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Of course, the spike of inflation we had when inflation was at 11% has made everyone poorer, not a lot we can do about that, but at this point in time with the real interest rate being positive (The Fisher effect) then in simplistic terms savings rates are outstripping inflation rises and so growing slightly again.

But, and this is another aspect of my comment that Rob didn't even think about before jumping in with his size 6's, the warnings have been that people would be too optimistic too early about the fall in inflation and call for the interest rate cut too soon, which just leads to inflation coming back out of control again. It's what has happened previously in periods like this.

And the current headline figures are a little bit of a fudge for this year anyway, since they haven't included the Govt energy grant in the figures. So whilst the headline inflation rate of energy has dropped, due to the slight drop in unit cost, the actual amount people are paying is still more than last year because they don't have the Govt handouts.

delta0 said:
Salary growth has cooled off from last year so we should see the first cut sooner. They had mentioned this was a concern and I expect they were holding off because of this.
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Agreed, the job market is another aspect to this, but we know they (the BoE and Govt) are comfortable with job losses/recession if that's what's required to fully tame inflation. Then let Rob go boohoo to them about "WoNt aNyOnE tHiNk oF tHe cHiLdReN mOrTgAgE hOlDeRs"
 
dlockers said:
With all due respect though, and I am not particularly smart, 5% on £6k is like 25 quid a month. The only people benefitting from higher saving rates are losing big time on increased mortgage costs, car costs. The stock market is now underperforming where longer term savers should be going to anyway.
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Call me conspiracy theorist if you want, but it seems to me that for the last twenty years money has been flowing into housing, going up and up the chain to the top. For everyone both buying and selling, the marginal gain is small, but for whoever is at the very top of the chain, that money ultimately all flows to them which would have been reinvested or accumulated.

Now that market reached saturation, and growth was reduced. How to continue making money - ah yes, its now time again to ramp up interest rates so that the huge amounts of accumulated cash at the very top now starts earning 5%.

Not many people benefit from this, but those 0.001% at the very top of pyramid benefit massively from interest on accumulated wealth.



slinxy said:
I think people including myself in this, have been used to living of free or cheap credit.
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Its been this way for 25 years. Stoozing was a thing back in the early 00's, when base rates were similar to what they are now but there were loads of 0% credit card deals starting to appear. Banks didn't like it of course, they hate people making money off their promotions the same as the gambling sector hates people making money off matched betting, even though its a tiny proportion of their customer base. How can you keep growth going but prevent people taking advantage of things like stoozing - easy, cut interest rates and make it non viable.
 
EvilRob said:
You keep making comments like this, but persistently high inflation is bad for everyone including you and wipes out most of whatever return you think you're getting on your savings. Your savings will have lost a significant proportion of their spending power through this.
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Indeed. So cutting rates and getting the 4% inflation level entrenched would be a stupid move.
 
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