Base rate just hit 5%

[LisaP1215]

Is there no end to these rises??!!

Oh come on, that is not particularly high. Look at historical rates.

I hate this attitude. For some people, this is all they’ve known and this will be high to them. Saying ‘well we had it worse in 1989’ is not at all helpful

Historical rates when houses cost virtually nothing, you mean?

15% of not very much is . . . not very much.

It's true though. I'm in my 40s, about to buy a house and even I think 5% is not particularly high.

Seriously @LadyTemperance ??

It doesn’t help to hark back to the last few years either though. If people took out 25 year mortgages based on the base rate having being tiny for the last few years they have been stupid/ill informed.

So we’ve got an all time highest cost of living, more food banks than McDonald’s, and a 5% rise isn’t much?

well, bully for you if it’s “not much”. A hell of a lot of other people aren’t so lucky

Yes, interest rates were higher in the 80s/90s, but house prices weren’t so much bigger compared to wages.

I wonder if people will have to down size and how that will impact properties. With stamp duty downsizing can be expensive too though!

It's true though. I'm in my 40s, about to buy a house and even I think 5% is not particularly high.

Surely people understand the basic concept of 5% of a bigger amount has similar impact to a higher % of a lower amount?

I wonder if people will have to down size and how that will impact properties.

They probably have no mortgages or small ones if we are talking bigger houses

Factor in the price of food and fuel , insurance , clothing etc on top of these mortgage rises . A worrying time .

5% is particularly high if you've been used to 2% or lower for the past decade and your income hasn't increased a great deal in that time. This is going to have serious consequences for large numbers of homeowners.

I’m not talking about the 1980s though, of the top of my head rates were last around 5% in 2008. Low rates just mean people borrow more and house prices rise, rising rates might be painful for some but are not necessarily a bad thing for most people long term.

the house I bought in 1990 was 50k

we needed a deposit of 3k

i was 21 dh 22 earning 18k and 22k (so not massively different to minimum wages now)

that same house is 250k

doesn't take many brain cells to
realise how unaffordable that house would be today for average earners. It's just a standard 2 bed house.

It's 5% in the US and their inflation is half the rate of ours in the UK.

Think we'll be seeing more rises

Sorry what I mean is those who bleat on annoyingly (you know who you are) can just do one. Maybe take some equity out of your houses and give to those struggling 😂

Also people ignore what has happened to salaries over the last 15 yrs

It’s high for the 000’s who now can’t afford to pay their mortgage and risk losing their homes. Forecast is that huge numbers will be affected

The rent is often pegged to the landlord's mortgage too (also on a very low rate). The only option would have been to live at home permanently (I did that for three years but most parents don't really want you hanging around them into your 30s) or to buy a small place and try to increase earnings as if its a full time job i.e. applying like crazy to get a 20% increment every year. So that when your five year fixed deal expires, your income is much higher.

DH and I did both of that (lived at home, then bought a small flat near work to maximize earning potential) but we were lucky to be in London where this is possible and he was also lucky to have a family home in London.

If you were the average young person (in their 30s) who rented in the city, moved out to a small town to buy a 3 bed house to start a family, had a baby went on maternity leave and then part time hours, thereby reducing income by a quarter and increasing expenses, plus the addition of commuter fares for the sole breadwinner, you would be stuffed.

Hopefully this means house prices will come down. Isn't that what many first time buyers need/want?

A quarter of a million for two bedrooms? Are you in Zone One or something? <misses point of thread>

When I took out my mortgage in 1996 interest rate was around 5%. Difference being I only borrowed £60,000!

2008 was 15 years ago. There will be people who took out their first mortgage which is now up for remortgage at a much higher rate, who were still learning to toe their shoelaces the last time rates were this high. Most people make most of their life decisions based on the level of stability they’ve known for a period of years. It’s neither stupid nor ill-informed, it’s how humans reason.