Interest rate increase confirmed.

[FreeBritnee]

Fun. Fun. Fun.

Yup.

www.dailymail.co.uk/news/article-10316249/Bank-England-faces-calls-raise-rates-meeting-TODAY.html

The start of many measures to combat spiralling inflation.

Spiralling inflation caused by spiralling costs of necessities, not customer spending on frivolities.

I wonder what it will mean for the housing market?

Not much at this point I wouldn't think. It would take sky high rates to slow that out of control juggernaut of irresponsible borrowing and ridiculously escalating prices down.

There has been predictions of 4/5 rate increases over the winter and into next summer, adding up to about 1%

With utilities rising and petrol, it’ll mean considerably more out of households spending

Interest rates did rise through the spring and summer, but much more so into the autumn 2.25% for now, still very low but whether it'll rise again this winter?

Have you not watched the news for the last six months? Interest rates are going up hugely.

Have you not watched the news for the last six months? Interest rates are going up hugely.

2.25% is not high interest rates, they are still historically low - 15% was high back in 1990 and through the 90s they were 8%

average interest rate over 300 years is around 5% so still half of average is low

You asked whether they'll rise again this winter - of course they bloody will.

Agreed that 10% mortgage rates or whatever they get to next year isn't high compared to 15% that we briefly had decades ago, but still bloody high compared to rates in recent memory.

And don't forget it's the BoE base rate that's 2.25% - not mortgage rates. They're typically 5% higher.

And don't forget it's the BoE base rate that's 2.25% - not mortgage rates. They're typically 5% higher.

well just imagine then 15% at 5% higher would be very high

but thanks for the heads up that they’ll be 10% this winter, which months are they rising to this level?

I doubt the BoE rate will go as high as 15%. 8-10% is possible though by next year surely? It'll be 3% + on Thursday. Unless inflation gets under control (unlikely in the short term) there'll be another 0.5-1.0 rise in December, another in Jan or Feb.

At the current BoE rate new mortgage products are around 6%. It doesn't take much imagination to see that 10% mortgages are very possible in the next six months.

10% would be a very big stretch as to what the analysts are expecting.
Debt would be un serviceable at that amount, and inflation would be the least of their concerns.

10% would be a very big stretch as to what the analysts are expecting.
Debt would be un serviceable at that amount, and inflation would be the least of their concerns.

Mortgage rates already start at 6% - 10% maybe a stretch, but I don't think it's a huge stretch. As the pp pointed out we've been there already.

I agree that 4/5% interest rates are much more normal than the 0/1% we've had in recent years.

But those comparing to 80s/90s - don't forget that the gap between wage and house price is much bigger now. So a 4/5% interest rate will feel like 15% did in the past.

Base rate and fixed rates are not the same thing. Base rate hitting 10% i very very unlikely.
fixed rates hitting 10% are a different matter

And don't forget it's the BoE base rate that's 2.25% - not mortgage rates. They're typically 5% higher.

@titchy you said if its 10% its then 5% higher

so with your predication that they'll go to 10% this winter that means they'll be at 15%

back in 1990 it was 15% but it was actually at 15% it wasn't 5 % higher - thank fully

I was talking about mortgage rates, not the BoE rate

But I can envisage BoE rates getting to 6% - can't anyone else? Which would mean mortgage rates of 10% or higher. Maybe not till next year, but it wouldn't surprise me.

Margins tend to be around 1-2 percentage points. Obviously it’s higher for high loan to value and BTL.
Whatever the increase on Thursday is likely to be added to current mortgage rates, the margin is already included in current rates.