The upcoming UK tracker time-bomb

ILW

HAMISH_MCTAVISH wrote: »

The article is pure hyperbole.

The biggest of the many tracker reset peaks, already happened....:rolleyes: With no real impact.

The next peak(s) will happen with a similar lack of impact.

• As trackers reset and people go onto SVR, household disposable income reduces.
• As disposable income reduces, spending reduces commensurately.
• As spending reduces, inflationary pressures are lowered, counteracting the increase in inflationary pressures from the weaker pound.
• As inflation doesn't rise, interest rates stay low, continuing the weak pound which drives exports and a more favourable balance of trade.
• Better exports lead to lower unemployment (note how much lower unemployment is than was forecast).
• Lower unemployment leads to less reposessions, and less destruction of wealth.

So perversely, higher mortgage payments (up to a point) actually reduce inflation, lower interest rates, create a weaker pound, better employment and less reposessions.

It's a brave new world.....
:beer:

That does not seem to apply to such things as energy prices and government spending, which bear no relation to other forms of inflation.

Harry_Powell

I dont see why there is a ticking time bomb. If people have these low rate trackers, they must have bought a while ago and so know all about rates around the 5 to 6% mark. All that will happen when they revert to their lender's SVR, is that they will return to paying more normal mortgage rates. Moreover, there is plenty of evidence that people are overpaying their mortgages or increasing emergency savings while rates are low.

People who have bought since the crash, myself included, will be unaffected because we couldn't get hold of a cheap tracker mortgage anyway. Only in this country (and perhaps only on this board) would we worry about a return to normal interest rates from ridiculously low ones, instead of being happy with the respite that low rates have granted.

Heyman_2

Really2 wrote: »

Timebomb = I have an indefinite period to prove myself right. Wait until next year I tell thee (or any time after now).

There is an old age timebomb and most people will die of it, you heard it here.

R2 - you are so right, I get sick of reading about timebombs on here - they all get wheeled out at least every few months by the usual suspects.

Some people just want everyone to live in perpetual fear it seems - but then we all know that it's easy to control people's actions using fear. :rolleyes: