Soldato
They are expecting a June cut for the UK. I think that could be 50:50 but the cut is coming
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
I really don't see where people keep thinking the rates are coming down. This rate is normal, maybe even a bit low when compared to pre 2008 rates.
People are still buying things, house prices are going up in some places and everywhere I go for take away is pretty busy. People still have money and are spending it and those businesses that aren't running on credit, that would go bankrupt anyway, are doing pretty well.
Some people may be struggling, and I feel bad for those that are, but unless everyone is out paying for things on a credit card then I dare say I'm not seeing this myself.
People are still buying things, house prices are going up in some places and everywhere I go for take away is pretty busy. People still have money and are spending it and those businesses that aren't running on credit, that would go bankrupt anyway, are doing pretty well.
Some people may be struggling, and I feel bad for those that are, but unless everyone is out paying for things on a credit card then I dare say I'm not seeing this myself.
Don't let people having a takeaway or two fool you. The UK standards of living has declined drastically over the last few years and interest rates (mortgage and rent) have and will continue to contribute towards
Soldato
I think it's more down to easy/cheap credit...
before interest rates was low, people would prefer to spend than save.. a lot of people including the government was living their lifestyle on credit.
now that interest rates are high, it's much more costly to "maintain" their lifestyle. 0% purchase/balance transfer cards have short periods and lower credit limits... there's lot less cash floating around.
In my hillbilly village, it's quite common to see people posting about free items then a week or two later ask if anyone is free to do their hair or nails... I'm not hard up, but I still cut my own hair and nails! Best thing about lockdown was that it stopped me having £40 pounds haircuts and the £65 trimmer that I got is still going strong.
before interest rates was low, people would prefer to spend than save.. a lot of people including the government was living their lifestyle on credit.
now that interest rates are high, it's much more costly to "maintain" their lifestyle. 0% purchase/balance transfer cards have short periods and lower credit limits... there's lot less cash floating around.
In my hillbilly village, it's quite common to see people posting about free items then a week or two later ask if anyone is free to do their hair or nails... I'm not hard up, but I still cut my own hair and nails! Best thing about lockdown was that it stopped me having £40 pounds haircuts and the £65 trimmer that I got is still going strong.
Associate
I'm going with 0.25% as a prediction
Possibly
More likely
I agree. And hope!
Soldato
It's not just consumers being impacted though.
Business borrowing also costs more - discouraging investment. The business environment is different now to what it was in 2008 - a lack of cheaper labour willing to do typically undesirable jobs means large investments need to be made in automation.
Government debt is also costing more at higher interest rates.
I think the only reason the rate isn't dropping quicker is to maintain the GBP/USD exchange rate - and therefore the cost of energy and other stuff priced in dollars.
£40 haircuts it cost me £12 today, think you need to shop around lol
Soldato
My mortgage is up in July, was hoping for some downward movement. Don't know what I'm going to do, I can afford the increase but it'd be sods law I lock in for 5 years and the bottom falls out of the market
I also cut my own now.
Had an interview in lockdown and had to buy some clippers.
Seemed a waste not to carry on
I'm in the same position. Choosing a mortgage with as low a penalty for ending early is a small part of it.
I've been offered a 5yr at 4.4% vs a 2 year at 4.84%. The penalty for early exit is 5% of total birrowed in year 1, 3% year 2 and 2% of borrowing in year 3 and onwards. Then its a case of working out how much of an interest rate drop is needed for it to make sense when to exit the 5yr deal with the penalty. It turns out its quite a drop and probably unrealistic.
Last edited:
I think that's optimistic to be honest...
Unless rates come down and wages increases a lot.
Don
Couple of million extra immigrants by then will bloat housing demand.