Mortgage Rate Rises

Mercenary Keyboard Warrior said:
The drop to silly low rates was rather fast as well, in fact probably faster than the rise has been.
I don't remember people complaining then about fast rate changes, in fact I seem to remember most people gloating about cheaper mortgages ;)

But yeah pensioners with some savings relying on the interest for a few extras have been well screwed over the last practically 15 years!

Some peasants get screwed when rates go up, others when they go down.
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Yeah people forget about having their house going into negative equity in 2008/09 and not going positive till around 2014! My old boss was in negative equity till about 2016-17 because he paid big in 2007 ish.
 
Mercenary Keyboard Warrior said:
The drop to silly low rates was rather fast as well, in fact probably faster than the rise has been.
I don't remember people complaining then about fast rate changes, in fact I seem to remember most people gloating about cheaper mortgages ;)

But yeah pensioners with some savings relying on the interest for a few extras have been well screwed over the last practically 15 years!

Some peasants get screwed when rates go up, others when they go down.
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Bit disingenuous to liken a global financial catastrophe like happened in 2008 with a lettuce trying to give a tax cut to rich people.

In fairness, until that the rate WAS heading back up steadily.. I guess it could have gone up more quickly to something more normal, I wonder to what extent this was global economics doing it's thing like how right now I suspect the BoE wants to drop them but can't for the sake of the currency etc etc.
 
Hagar said:
If you are living on a low income and this is supplemented by savings interest, it is absolutely as bad to have your income halved or more overnight. I am thinking pensioners without supplementary pensions, but others also on fixed incomes.

As for the speed of change. It should not have happened if a gradual transition to a more normal situation had been finessed by the banks. It would also, probably, not have caused such a rise in the house market price and the short termism of two year fixed rates forever chasing the elusive bargain. Only the mortgage providers and banks have gained I feel.
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If you are living off savings interest you need a LOT of money up front.

I understand when you're retired etc you have no money coming in, but for example if you're trying to make a minimum wage income at 3% you'd need about £500k sitting about.

if you have that and all you're doing is taking the interest I'd argue you've made some bizarre decisions.
 
matt100 said:
If you are living off savings interest you need a LOT of money up front.

I understand when you're retired etc you have no money coming in, but for example if you're trying to make a minimum wage income at 3% you'd need about £500k sitting about.

if you have that and all you're doing is taking the interest I'd argue you've made some bizarre decisions.
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No my situation is different, I have a decent pension, enough to live off, many do not.
 
matt100 said:
If you are living off savings interest you need a LOT of money up front.

I understand when you're retired etc you have no money coming in, but for example if you're trying to make a minimum wage income at 3% you'd need about £500k sitting about.

if you have that and all you're doing is taking the interest I'd argue you've made some bizarre decisions.
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You'd be surprised how many pensioners and for that matter people in general hold everything in cash because its 'safe'.
 
On 2.5% rate until Dec 2025, hoping rates come down a bit by then. Mortgage will only be around £80k left on a £250k house anyway so fortunate the difference in monthly payments isn't massive between 3-6% for myself, feel for those with the larger mortgages, some crazy figures in here!
 
Hagar said:
In a mature economy the bank rates should allow savers to maintain an equity with modest inflation in the economy. 1% rates should have been disposed of after a year or two, not a decade. There are two sides to the coin. 0.1% interest is ridiculous.
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Oh I agree completely. Low rates for so long have enabled people to take on far higher levels of debt and driven up house prices. Of course many have benefited from this massively.

That doesn't mean it's right to be punishing people now though by doing the reverse. Two wrongs etc...

Hence why stability is important, both then and now.

Mercenary Keyboard Warrior said:
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I don't remember people complaining then about fast rate changes, in fact I seem to remember most people gloating about cheaper mortgages ;)
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Oh totally. Almost immediate short term gain for anyone with an existing mortgage at the time, and huge implications later. Just like this increase will be I guess, but the other way around. A lag before repossessions start increasing dramatically and the economy goes into recession in a couple of years time (if rates don't fall back) because no-one has any disposable income any more.

I imagine also that more people benefit from cheaper debt than better savings rates. Obviously that is a function of cheap debt changing behaviours, but also should be considered when we talk about who loses and who wins from rising interest rates. Because high interest rates benefit the rich primarily.
 
Well I got that one well and truly wrong ! I thought a rate drop would have happened by August or September and then a G.E called , how wrong was I !

It don't add up , either yhe tories have more skeletons to show or Richis just had enough.
 
My fixed term is coming to an end in October and hsbc are offering me a 2 year deal at 5.08% or a 3 year deal at 4.94% with no fees. I'm unsure how the interest rates will go, but I'm thinking to go with the 2 year deal and just hope that the interest rates will have come down a little by the time it ends?
 
Soulja said:
My fixed term is coming to an end in October and hsbc are offering me a 2 year deal at 5.08% or a 3 year deal at 4.94% with no fees. I'm unsure how the interest rates will go, but I'm thinking to go with the 2 year deal and just hope that the interest rates will have come down a little by the time it ends?
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Do the maths… which is highly dependent on how much is still left on the mortgage, then you can see how much it’s has to come down by in 2 years for that option to be profitable and then guess if that’s a likely scenario.
 
Soulja said:
My fixed term is coming to an end in October and hsbc are offering me a 2 year deal at 5.08% or a 3 year deal at 4.94% with no fees. I'm unsure how the interest rates will go, but I'm thinking to go with the 2 year deal and just hope that the interest rates will have come down a little by the time it ends?
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Have you shopped around?

But yea out of those two I would be leaning towards the two year rate.
 
BUDFORCE said:
Have you shopped around?

But yea out of those two I would be leaning towards the two year rate.
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I've checked a few comparison sites and the monthly amount is very similar, so it doesn't seem worth the hassle to move to a different to a different provider. I do also have the option of a 5 year term that's around 4.5% and puts my mortgage up by around £80 a month, which isn't the worst, but obviously if the rates are expected to come down I'd rather lock in for a couple of years and then hopefully get an even cheaper mortgage deal after the 2 year deal ends... I really wish a had a crystal ball!
 
www.bbc.co.uk

European Central Bank cuts interest rate to 3.75%

The eurozone is the second major economy to cut its main lending rate this week after Canada.
www.bbc.co.uk

“The ECB has stolen a march on the Bank of England and [US] Federal Reserve – who are both potentially still a few months away from cutting – and will breathe life into an economy that desperately needs some form of stimulus," she said.

Central banks have kept rates high for the past two years to bear down on the rate at which prices are rising, with most targeting an annual inflation rate of 2%. But higher interest rates tend to dampen economic growth
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Positive news
 
So if the UK does cut interest rates, and house prices continue their silly increases, how is that viable long term?

I just don't understand how the country will operate if house prices go over 10x income or more/keep climbing.

Naturally it has to stop or literally no one will be able to afford a house.

We need either a massive house price decrease, or a massive wage increase.
 
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