Interest rates go up! Now 4.75%

movieman

High price inflation doesn't.

In fact, high price inflation makes debts worse, because when the cost of essentials is increasing dramatically, you have less money left over to waste paying interest to banks.

Ultimately of course if high inflation persists, wage inflation almost has to follow suit - but that will bring associated job losses and recession as companies cut costs.

And when both Gordon Brown and the BoE have said that the one thing which would definitely lead to higher rates is increases in wage inflation, that means rates go up too.

Debt_Free_Chick

Bargain_Rzl wrote:

Well, I have to say I'm pleased that my fixed-rate mortgage application went in yesterday

I hate to be the messenger of doom - and I may not be - but you should read the small print. You may find that you don't get the advertised rate at the date of application. You might need to wait and see what's on the offer. Check it carefully!

catkins

Although I do genuinely feel sorry for people with a lot of debt and anyone who is now going to struggle with their mortgage repayments, it was obviously going to happen sooner or later. I just hope that house prices start to fall to the more realistic prices they should be. If it stops any more BTL's then good.

F_T_Buyer

Hold on. How many people have/are complaining about rising prices? Gas, Elec, Food, petrol... they only way to slow the rising costs is to increase interest rates. 4.75% will do little to slow essential cost inflation, but at least it's a start.

Byrneand wrote:

Oh my God no!!

How will I cope with another £50 a month on my mortgage. I suppose I could start with my kidneys - but can only really sell one of them.

Yes - rates have gone up which as one poster pointed out should help strengthen the economy in the long term. But its not going to make much difference to most people. Most people will have factored in at least a 1% movement in interest rates into their payment calculations and will be able to flex spending to meet that. Equally the news on high inflation is positive in some respects as it makes the value of your debt lower.

Actually - quite a result, especially when combined with the relatively strong (against forecast) house price performance in 06.

How many people can't cope with rates at 4.5%? Look around MSE and see how people are taking on debt just to live.

Rates should never have been reduced last year, it just lead to a 12 month credit binge. They only way to slow that is to rise rates, people will not stop taking on debt on their own!

Unfortunately for borrowers, rates need to be around 6% to stable the financial imbalances in this country.

Pobby

catkins wrote:

Although I do genuinely feel sorry for people with a lot of debt and anyone who is now going to struggle with their mortgage repayments, it was obviously going to happen sooner or later. I just hope that house prices start to fall to the more realistic prices they should be. If it stops any more BTL's then good.

Imho so much hpc has been caused by the interest only mortgage.Many of the btl lot have got into that idea and I think many will perish as IRs increase.Even more crazy is the IO mortgages being used by folks on their own homes.Bet most of them have no real plans for any repayment vehicle.

Hate to say this{and a lot of my friends think I am a prophet of doom} but when this whole debt business starts to fall apart the results will be frightening.

Bargain_Rzl

fuzzylogic wrote:

Signed our mortgage application yesterday and has been sent off today. Could this mean we will not get the fixed rate we agreed to or will it be ok? ... Its with Nationwide

I should think it will be fine. Just because the base rate has gone up doesn't mean the banks/BS's go up within the same split second. Nationwide upped their rates at the start of this week anyway, and the same rates are still being advertised on their website - so if you chose the reservation fee option I wouldn't think you'd have a problem. I've gone with Nationwide too. (Though as Debt_Free_Chick says, do make sure you check the small print when the offer comes through).

BobProperty

fuzzylogic wrote:

Signed our mortgage application yesterday and has been sent off today. Could this mean we will not get the fixed rate we agreed to or will it be ok?

Its with Nationwide

Ta

I'll just agree with some others here. Chances are the funds for this "product" are already allocated/bought so unless they either pull the product or the funding has been used up already, you should be able to get the mortgage you apply for.

monkeydust_2

for those with variable rates like myself I wouldt be too worried! I was expecting a rise this year (in fact two max) bit suprised it happened this eary! Still rates are very low - BTW watch out for banks offering un-attrative fixed rates now in an attempt to catch scarred punters!

bikerqueen

I blame the parents

mi-key

Lloyds TSB put their rates up 8 weeks ago because they thought this was going to happen - would be interesting to see if the greedy !!!!!!s use this as an excuse to put them up again !

The people this rate will hit are those who have overstretched themselves -the sort who thought a 5x income mortgage was a good idea - add to this the increased fuel bills, and this is going to hit a percentage of people who were already close to the edge.

Even though I'm a FTB and dont have a mortgage in place yet ( still in the making offers stage ) it doesnt bother me particularlt - dont have any debts, and the amount we are borrowing is just over 2.5x our joint income, so we have plenty of leeway to pay a bit more.

The other people it will hit are those greedy sellers who are insisting they are going to get top whack for their houses - their house in real terms has suddenly dropped in value - when you take into account the cost to the buyer has suddenly gone up.