Interest rates up to 5.75 per cent

[layman]

I think there will be another one after this, perhaps more. The days of low interest rates are over for now. Good for savers though.

Interest rates are historically low at around 6/6.25 per cent aren't they? I'm sure I've read about 8 is the average.

I agree with the poster who said people will knuckle down and just pay their mortgage and stop the frivoulous stuff, but then I think who will suffer because of them being prudent?, the hairdresser?, holiday companies? gyms? .....could mean redundancies which would again result in forced sellers.

It's worth watching oil prices to get a handle on inflation though.

And as for 10 years/25 years fixed, what if the rates go down....not good either.

....tis a minefield at the moment.

noodle, lol

R.I.P. affluenza

Agree re oil prices as Gordon is betting on those coming down to lower inflation but so far oil prices are not budging!

The problem isn't so much the interest rates going up, as the size of the mortgages. A higher rate on a smaller mortgage would be a reasonable increase to many, but people have such big mortgages now, a small percentage increase is a lot in cash value.

Wouldn't think oil is going to come back much - not if you believe the IEA (International Energy AGency) forecasts on demand growth. Can't remember where I read it, but someone is foreacsting that we need the equivalent of a new Saudi Arabia every 3 years...or something equally scary..

Yes - but people have to have big mortgages because housing is so expensive because there is a huge demand and smaller supply because lots of the supply is empty buy to let.

Interest rates are very low - remember the 1980s! I am sure my mum fed us value baked beans for months

Interest rates at historic low? Depends how you define history: they are around average over the last 15 years but definitely low if you go back 30 years.

But isn't that the problem - 15 years is easy to remember - so there are some people who can only really ever know low interest rates and others who are a bit older who remember it can go up and up and up

www.houseweb.co.uk/house/market/graph.html

Can anybody tell me why rates were so high in the late 80s?

because inflation was rampant!

must admit - am enjoying this debate immensely!

great to see I hvan't lost my knack of killling threads dead!

Could you get value baked beans in the 80's? I was in Wales in a small mining town, so most of our food was from the French miners who sent parcels in sympathy. My mum was the only one not afraid to feed her kids poisson, so we had a lot of fish!
Sorry, a bit off topic!

we have just moved our mortgage to hsbc and they offered us a rate of 5.25% for the next two years

Barstewards!!!

We have a smallish mortage but over the last few months it's still increased by about £40 a month. Still at least we don't have a fixed rate due to come to an end. Now that would hurt....

I remember the early 90s too. Scary! About a month before our wedding our mortgage rate went up to 15% (only for about 12 hours I think). We lost 33% of the value of our house when we had to sell it a few years later.

I remember the early 90's. I was only a teenager but I recall watching the news showing forests of for-sale signs and photos of the chancellor...Nigel Lawson wasn't it?