Only ones I can think of is the competition maybe slightly better rates and maybe willing to borrow more.
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Only ones I can think of is the competition maybe slightly better rates and maybe willing to borrow more.
Soldato
Inflation has fallen to 3.4% and is on track for 2% in months.
Soldato
aahh the magical 2% mark which was made up by some Aussie for a hypothetical report lol
Still good to see it and true inflation go down.. I still don’t think mortgages will go sub 3% thou..
Caporegime
Bank aiming for 3% rates early next year. Will be a welcome relief.
What?
Caporegime
Will be a welcome relief to have lower mortgage payments
I mean which bank has said this.
Soldato
I'm not sure if he has put an erroneous full stop in his post and it should read "Bank aiming for 3% rates early next year will be a welcome relief"
This would make a little more sense as its a "hope" rather than a fact
Caporegime
A chief economist said it on the BBC
So no bank said it then.
Soldato
I think people are forgetting that wages "should" be adjusted with rate of inflation, and the cost of shelter is part of the inflation calculations. The longer you have till your remortage the better of a chance of your wages catching up.
my mortage when up by 2.02 percent last year, but my salary went up by 4% this year and 5.8% the year before...
It shouldn't matter if intreast rates are at 15% if you're getting a 20% payraise...
That’s not quite right, as your mortgage wouldn’t have gone up by a proportional 2.02%. For a lot of people that could have doubled the interest charged on their mortgage.
Caporegime
Thats 15% is probably on a sum far higher than your salary and you don't get to take tax off that 15%. If you get a 20% payrise and are a higher rate earner you could be seeing a real term pay rise of more like 10-12%. A huge amount of that money you are paying into your mortgage will be going purely to service the debt as well. There are also plenty of people who don't get inflation beating payrises.
High interest rates in general are not good for peoples wealth.
It does matter because of the size of the debt. Your salary is likely to be much smaller than your mortgage debt so smaller percentages make bigger differences.
Soldato
Yes, proportion matters.
Mortgage balance is typically going to be much higher than wage therefore impact of interest rate changes is not equal.
Caporegime
My mortgage interest went up 3%, but that actually meant it went up +243%, which saw my mortage payments increase by 50%, and the share of that repayment that was capital repayment significantly decrease.
Even with a potential 33% payrise later this year, I'd still be down a large chunk compared to 2022.
As others have said. The typical mortgage is so much as a ratio to free cash after tax etc, absolute salary vs absolute mortgage matters.
Ie.
I earn 1 pound and get a 100pc pay increase.
Yay. 2 pounds.
But
I have a 100k mortgage and it goes up 1 percent.
That pay rise is wiped out by orders of magnitude.
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