Convince me that Rates are not going to the moon...

Amblin

Hey Everyone,

This is my first post here, It's been quite the struggle to find an informed UK based money forum, so I'm glad to have found you.

This is in no way Tin Foil/ Conspiracy or Political.

Given the amount of uncertainty rammed at us by our media, and a good deal of apparent panic by those in power, I am concerned that we Joe Public are not fully being given the picture financially.

I am asking for your Mortgage Interest Rate predicitions, beyond that of the immediate few months, where rates will surely be dabbled with to help "buff-up" the end of year figures for businesses. (Bonus for the CEO's of course )

My parents tell me of times when they first married of 15% interest rates and terrible deflation, when they were told that their pay was being cut because the cost of things had dropped.

I have heard that word deflation in the media for the last few days.

I am not convinced that these low SVR rates I enjoy at the moment are sustainable. They were IMHO an attempt to get us spending over Christmas. I believe that the disaster has not yet unfolded.

I am not going to lose my home because a load of Bankers got greedy. And I intend to fix, even if it doesn't appear right at this moment and costs me a little more each month. 4.89% may look fantastic in 18 months.

What say you all? Am I mad to fix now? :rotfl:

I'm not paranoid. I am convinced that the UK is very close to needing IMF help and Interest rates are a mere reflection of risk to the banks. Surely at some point all this money thrown at the banks has to come home to roost?

Perhaps I have got it all wrong and that is why I would really value your opinions.

Thanks.

Wutang_2

Sorry, whats the question?? What will the rates be in the next few months? Or are you mad?

I only know the answer to one of those

Sooler

depends how long the fix is for and how much you're being charged for it.

I'd allow for future rates up to 15%

Amblin

Wutang wrote: »

Sorry, whats the question?? What will the rates be in the next few months? Or are you mad?

I only know the answer to one of those

:rotfl:

The question is whats the longer rate prediction and am I mad to fix now?

Thanks for the replies

beecher

I am on the SVR and as things stand I think I'll be fixing for 5 years in the next 3 months or so. I don't think I'll still be on it by the end of the year. I think interest rates are going to rocket and when they do I think fixes will be less affordable than they are now. I think they may come down a little bit first though. Orginally I hoped for a 4% 5 year fixe but think I'd be happy with 4.5%.

I am risk averse though so tend to pick the 'safe' option.

Amblin

beecher wrote: »

I am risk averse though so tend to pick the 'safe' option.

Thats the phrase I was looking for "Risk Averse".

Im thinking that leaving it till Feb 22 should be enough time for Nationwide to pass on any cut made this month?

Of course there is that nagging thought in my mind that Japan had 0% for many many years.

It's so difficult. No-one with a vested interest want's to tell the truth, when for me at least, telling the truth would enable me to fix and sort everything, thereby creating confidence and enable me to start spending and help stimulate the economy.

Catch 22 :rolleyes:

Great replies! Keep em coming.

Fliss_M

Ya see now you got me worried. I come off a fixed in feb onto a tracker at +0.99 and I am in neg equity so am well and truly stuck with it. So if they rocket to 15% am also well and truly stuffed! But wasnt that the point of giving the BOE control in 1997? So those sort of rates wont happen again?

beecher

Fliss_M wrote: »

So if they rocket to 15% am also well and truly stuffed!

I'd be overpaying as much as possible while on low rates - this will reduce the capital outstanding and allow you to gradually reduce the overpayment as interest rates rise. I think people who get used to paying interest rates of 2 or 3% are going to be in for a bigger shock than people those who do so.

Smurggle

I hear so many people go on and on about the rates hitting 15% in 1900 and frozen to death. Let's face it that is pretty unlikely given the situation out there and the BOE have control of what they do now. If rates went up that much then half the country would lose their houses as we are all in much more debt than we were back then.

Maybe I'm just a daft optimist but I think things are going to stay as they are for a year or so and then the rates will rise slowly back to about 5-6% and stay there. Call me mystic meg!

Amblin

Fliss_M wrote: »

Ya see now you got me worried. I come off a fixed in feb onto a tracker at +0.99 and I am in neg equity so am well and truly stuck with it. So if they rocket to 15% am also well and truly stuffed! But wasnt that the point of giving the BOE control in 1997? So those sort of rates wont happen again?

Im not trying to spook you! Sorry, I am simply exploring my own options, with a cynical view of the world, also trying to look at the experiences of the past and apply some of that to today. There are many who believe that whats happening now has never quite happened before though.

Maybe, moving the control to the BOE IMHO was simply political. If things go well they can say "We did the right thing by handing over control". If things go wrong, they can say "It's not our fault". :rolleyes:

Also, quite possibly, I am completely wrong about that aswell.

Amblin

Amblin

Smurggle wrote: »

I hear so many people go on and on about the rates hitting 15% in 1900 and frozen to death. Let's face it that is pretty unlikely given the situation out there and the BOE have control of what they do now. If rates went up that much then half the country would lose their houses as we are all in much more debt than we were back then.

My fathers point of view entirely.

However, maybe the whole thing is a set up to force us onto the Euro. Who knows?

Tin Foil Hat removed now.