What would you do if Interest Rates were 18%

Cat695

Rochdale_Pioneers wrote: »

Back when according to the Tories the country's finance was perfect we had Interest Rates steady at between 10-14%, with mortgage rates several percent above that. For year after year after year.

Now that according to the Tories the economy is broken and bankrupt, we have had interest rates below 5% for years and years, now dropping to probably 1% tomorrow.

So how would we cope? I dunno - I need to ask my Dad how he managed.

However you could buy a house for 20k a nice decent house which wasn't out of reach of peoples wages

now add the 18% to a 250k mortgage and lets see you say the same thing

And people who had a mortgage wouldn't be able to save because they would have NO money

Cat695

maninthestreet wrote: »

Offset mortgage with savings the same as my outstanding mortgage - so it wouldn't bother me.

and why wouldn't the banks put some sort of collar on them like they have done to some peoples mortgages when interest rates are so low??? only the person borrowing money will ever be out of pocket

purch

What would you do if Interest Rates were 18%

Wonder why ????

themanbearpig

I hope that interest rates will being getting close to double figures in a year or two, at which point the BTL dreamers will be forced to sell, and get left with a debt burden, and house prices will go low enough to allow those renting and FTBs to buy.

leveller2911

I'm debt free,rent (although I might be tempted in a year or so) and have about £35k in savings, id be rubbing my hands.....

mr.broderick

When we got our mortgage at 5.49 if i remember on the calculator it said "Be careful at 9.49 it would be xxx" Was just wondering if anyone who took a mortgage in the last 6 months if it said "Be careful about fixing at 6.5 right now cause if you take a tracker instead it will be £250 a month cheaper in a couple of months time" Interesting stuff.

Cat695

leveller2911 wrote: »

I'm debt free,rent (although I might be tempted in a year or so) and have about £35k in savings, id be rubbing my hands.....

but would you be rubbing your hands if your rent shot up to pay the LL mortgage?? (thats if he/she has a mortgage on the house and if you're renting privately)

Jasper27_2

Well when I first had a mortgage the rates were 15%! I guess then nobody though they would ever be as low as they are now so who knows what the future holds. We were both young and our mortgage was a big part of our outgoings but then at that time you couldn't borrow 6X your income or more. I have money in an ISA and I'm overpaying my mortgage which should be gone in a couple of years so I'd be quite happy for interest rates to go up so my savings can grow. Whatever the interest rates there will be winners and losers depending on individual circumstances.

themanbearpig

Cat695 wrote: »

but would you be rubbing your hands if your rent shot up to pay the LL mortgage?? (thats if he/she has a mortgage on the house and if you're renting privately)

I'm fairly certain that rental prices will not rocket if interest rates climbed to a high level. Simple supply-demand economics really. Rental prices have historically remained stable, and will continue doing so. Prices cannot suddenly be forced up without huge numbers of tenants either not paying, or moving out into a property which isn't so highly geared.

The tenants will not bail out the landlord because he can't meet his payments, that not a part of the deal. In this scenario, the landlord would have to either sell the property, or find another source to cover HIS debts.

jackieb

Mine would be £2110. My son would be paying a lot more for his keep!