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Interest rates about to start rising ?

(24 Posts)
yodelehoho Fri 29-Sep-17 12:55:23

www.bbc.co.uk/news/business-41439349

MiaowTheCat Fri 29-Sep-17 13:44:32

Message withdrawn at poster's request.

BubblesBuddy Fri 29-Sep-17 13:50:04

We paid 15% on our first house for 5/6 of the loan and 18% on a top up of £3000 - 1/6 of the loan. We were limited to 3 x the larger salary plus 1 x the smaller salary. I don't think anyone could buy anything if we got back to that. Good old Labour Govt in 1978! As the multiples didn't stretch us, we were ok but it is a warning as to how bad things were and how there are real dangers in inflation and interest rate hikes.

UnicornMadeOfPinkGlitter Fri 29-Sep-17 13:54:09

I've wondered when this will happen. It did seem inevitable.

A friend has just upper her mortgage by a lot. I would have thought in old terms she was already above the multiple because she had a larger than average deposit but has moved in the last week to a house over £100k more than the previous house.

She's a sub contractor and always on a precarious job situation. She obvious risk aware whereas I'm horribly risk adverse when it comes to borrowing money.

yodelehoho Fri 29-Sep-17 14:06:53

We're risk averse. First mortgage went up to 14-15% but we were okay. No mortgage now and savings being decimated so I'm delighted but won't hold my breath until it actually happens.

PerfectlyPooPoo Fri 29-Sep-17 16:58:07

So you're mortgage free with savings and delighted about interest rate rises hmm

We have a very small mortgage, have fixed for 5 years on a no charge for early repayment mortgage and a fair bit of savings but I think your post smacks of looking after your own interest only OP.

Not a babyboomer by any chance are you??

specialsubject Fri 29-Sep-17 17:54:41

Who on here doesn't look after their own interests?

Might be a jolly jape to hate older people but remember the heroic corbyn is one of them...

The destruction of savings for those who have them is one reason for lots of buy to let, although dippydrawers at the bank of england can't see it.

Changednamejustincase Fri 29-Sep-17 19:55:38

I think you are being a bit harsh. Why should people who invest their money in property see vast annual increases in the value of their investment whilst those with savings see the value of their money actually decreasing annually because the government has decided to keep house prices ridiculously high with incredibly low interest rates?

yodelehoho Fri 29-Sep-17 22:24:14

Perfectlypoopoo - what's your issue?? You have a very low interest rate. I paid 15% interest rate. You've also got savings. I'm trying to work out your problem.

The government at the only ones to blame for the whole mess the country is in with stupidly high house prices. There should have been a massive house price crash in 2008 and all this would have been done and dusted by now but high house prices are the only thing the government are actually interested in.

So, yes - I do want a house price crash, even although I am a home owner. Yes I do want higher interest rates. I've never borrowed money (apart from a mortgage), I've never spent outwith my means, I've been sensible and now I've got savings and they're disappearing quickly due to government printing money etc etc

PerfectlyPooPoo Fri 29-Sep-17 22:45:37

I'm not a fan of Corbyn's special

And it's the fucking glee of raising interest rates. Yes you may have paid 15% but how much was your house versus how much you earned?

A crash now would be disastrous for a lot of people. The government owe them a soft landing for they way they have totally fucked up the housing market.

eurochick Fri 29-Sep-17 22:49:06

Well they weren't likely to go down...

Hopefully the government will do something about stamp duty to compensate. Giving my life savings to the government for the privilege of moving house is not something I want to do more than once.

Viviennemary Fri 29-Sep-17 22:51:59

Yes I heard this too on tonights news. I think it's a good thing. They have been too low for too long. It might help level off house prices and deter property developers from making a quick profit. I don't think savers should be providing ludicrously cheap loans to people sitting on property that is shooting up in price by the day.

wherewithal Sat 30-Sep-17 10:30:27

The government owes homeowners a soft landing? Now I’ve heard everything. My sympathies are with those who continue to be priced out, not those who made a decision to buy based on ludicrously low interest rates – the chief cause of insane house price inflation in the first place.

Viviennemary Sat 30-Sep-17 10:53:36

My sympathies lie with savers getting next to nothing. And young people trying to get on the housing ladder. I hope house prices drop. It's better all round.

Valentine2 Sat 30-Sep-17 21:50:37

The house prices wouldn't crash. There is only so much interest rise they can bring on in this climate.
And yes, baby boomers absolutely must have a look at the ratio of salary:house prices now and compare it to when they bought. And then post here. hmm

OddBoots Sat 30-Sep-17 22:10:52

Something needs to happen to slow or preferably reverse the house price increases.

A rate rise would be very painful to those with mortgages though, although rates have been much higher historically that was back in the times when the average house was about 4x the average earnings, not 15-20x as they are now; the impact will be much worse so we can't really compare.

I don't know what the answer is though, I wish I did.

specialsubject Sun 01-Oct-17 10:12:17

Take London out of those stats and they change dramatically.

AnnieAnoniMouse Sun 01-Oct-17 13:51:52

We're about to remortgage and can't decide between fixed for 2 or 5 years. Any thoughts?

Badders08 Sun 01-Oct-17 13:56:40

It's inevitable
Dh and I have just remortgaged for a 5 year fix @ 1.29%
Atm we have about £100k equity so hoping that we don't end up in negative equity

GerardWay Sun 01-Oct-17 14:04:39

We have just done a 5 year fixed but we do own another of mortgage free properties. Me, DH, and mortgage adviser all agreed. Apparently people are already handing in their keys, that is so sad but will get far worse.

yodelehoho Sun 01-Oct-17 15:18:04

GerardWay - doesn't matter when people hand in keys - the debt is still theirs. I do think it shows recklessness if they are handing in keys when the interest rates are so historically low. Did they not EVER expect them to rise? They haven't risen yet. It will be miniscule.

MelArt Fri 06-Oct-17 10:59:22

We have just remortgaged to 5 year fixed deal for this very reason. As others have said it's inevitable, the base rate has been at 0.5% or below for the last eight years now.

Even if interest rates rise by just 0.5%, this can see repayments go up by almost £700 over the course of a year! (source: www.taylormade-finance.co.uk/can-homeowners-protect-interest-rate-rises/). If you're on a svr or your fixed deal is coming to an end, remortgage now whilst you can, just in case this actually happens in November.

Lucisky Fri 06-Oct-17 12:52:15

It must be years now that Mark Carney keeps saying about interest rate rises, but when it comes to decision time, nothing happens.
The housing market is a complete mess, but, as a pp said, London does sway the stats.
Personally I would like them to rise a bit.

MiaowTheCat Fri 06-Oct-17 14:47:59

Message withdrawn at poster's request.

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