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the_ash_and_the_oak

borrowing when rates are high and seeing them come down is good imo

chucky

the_ash_and_the_oak wrote: »

borrowing when rates are high and seeing them come down is good imo

borrowing when rates are low and stay low for a long period is even better.

in 1992 not many people would have expected rates to drop as they did in the mid-1990s

the_ash_and_the_oak

I know!

the surprise must have been what made it feel good!

Spartacus_Mills

nearlynew wrote: »

So when they are exposed as being unable to pay, what should happen then?

Depends, if the mortgage was obtained fraudulently then a spell at Her Majesty's pleasure awaits. This has already started to happen. A woman was jailed in Plymouth recently.

If they took a mortgage out which was 100%, 125%, deferred or whatever but did so legally then they will go into default and have a tough time of it.

Either way they are up a certain creek without a certain paddle.

MRSTITTLEMOUSE

ess0two wrote: »

Your probably right, all the bears whinging about prices and waiting for the jigsaw pieces to fit together,should just get on with it and buy.

I bought my first house and sat on bean bags for 18months,not ideal but it gets easier long term.

We did too.
It does'nt matter when you buy it's never easy for the first couple of years until things even themselves out.
It's like having a baby it's pointless waiting for the ideal time,there is'nt one.

MRSTITTLEMOUSE

chucky wrote: »

borrowing when rates are low and stay low for a long period is even better.

in 1992 not many people would have expected rates to drop as they did in the mid-1990s

That can be even worse,as when rates go up(as they do and will),people have problems.
Very few think of the savings of low rates as a temporary bonus but as extra income to spend and become used to doing so.

Spartacus_Mills

HAMISH_MCTAVISH wrote: »

It really does look like the years from 2007 until 2015 will be a once in a lifetime opportunity to have a tracker mortgage and/or a capped SVR and pay it off early.

And one of the worst times in history to have savings in the bank instead...

I don't know about the duration but I agree with the sentiment about savings. It is a pitiful time to have savings in the bank at the moment, even with Cash ISA's.

I think inflationary pressures will push IR's up to the previous levels (5 to 5.5%) in the next 24 months but until that happens I think Hamish has a point.

However the risk is that trackers now are being set to 2-3% above base so a move back up to 5% interest rates will be very painful.

chucky

Spartacus_Mills wrote: »

I don't know about the duration but I agree with the sentiment about savings. It is a pitiful time to have savings in the bank at the moment, even with Cash ISA's.

I think inflationary pressures will push IR's up to the previous levels (5 to 5.5%) in the next 24 months but until that happens I think Hamish has a point.

However the risk is that trackers now are being set to 2-3% above base so a move back up to 5% interest rates will be very painful.

to qualify Hamish's point a bit more and agree with yours - he should have mentioned the old style trackers that tracked at most 1% above base rate. the new style trackers aren't great with margins of 2.5% or 3% they could cause borrowers a bit of pain once the BOE rates hit 4% and they can't remortgage.

equities are the answer for savers, for the next 24 months at least.