The real price of a mortgage: 6.49%

the_ash_and_the_oak

StevieJ wrote: »

But why would we have 10% interest rates they would be in response to what?

kinda feeling this was a hypothetical argument - don't really think I introduced the 10% imo, think it was a response to this post iirc

StevieJ wrote: »

I think I will take the 6.49% high mortgage rate, you can have the low 10%

wanted to respond to this with the idea that borrowing at a time of higher IR might work out better than at a time of lower IR, not really sure who bought specific figures into the equation, although admittedly they are purely illustrative tbf

sabretoothtigger

Housing could be a better investment with high rates just so long as you can pay the bills, I could see that happening

high rates arent impossible just because they are low now in fact its more likely due to a whipsaw effect that often appears in markets. The longer we hold the balloon under water and the deeper it goes the more likely it'll rise up beyond expectations I figure




This time its different?

penguine

I like that graph, it looks like a city skyline.

puddy

i was a first time buyer 12 years ago and had a 10% deposit, i got a good rate then of 7.49 it was fixed although rates then went down and i was paying over the odds

mewbie_2

I'm with Graham on this 100%.:hello:

nearlynew

penguine wrote: »

I like that graph, it looks like a city skyline.

that's probably all it is.

sabretoothtigger

Why do the buildings keep getting smaller, I think its a premonition

It actually runs inverse to the debt build up I think. Kinda of a corrupt system like an ARM that the debtor can seemingly set their own rate of interest

abinanthanb

It would be great if people, who say that BOE rate doesn't have anything to do with Mortgage rate, can also explain what's the purpose of BOE rate. And how mortgage rate is fixed by the lenders in the present scenario?

Heyman wrote: »

Yes ok, you're right - those rotten banks should be making it easier given that we've bailed them out. Get those interest rates back down low and ease the lending criteria because that's what we all want isn't it

How can higher IR be linked with strict lending criteria?

sabretoothtigger

I think the BOE sets the overnight rate maybe but a mortgage is closer to the yield on a ten year gilt which is freely traded and set by the free market except when the BOE buys them back like it is now.

Im not 100% sure thats correct though. Libor is more relevant then the base rate I should think so best to follow that if anything
http://en.wikipedia.org/wiki/LIBOR

http://en.wikipedia.org/wiki/Federal_funds_rate

^TNX is the usa 10 year gilt yield, many newspapers will state the uk equal I think and its probably a similar figure of around 4%


http://www.thisismoney.co.uk/libor 3month rate




http://www.bloomberg.com/apps/news?pid=20601085&sid=ag0dlZjkyhrw

b0rker

chucky wrote: »

no, no you can't do your usual turnaround on this one Graham "I Look For An Argument With Everybody Who Disagrees With Me" Devon.

Seriously.

I have blocked him.

There are some very smart and interesting bears on this site but he is just a whining wee girl who's concept of the protocols of intelligent debate do not correlate with mine in any manner whatsoever.