Interest Rates set to keep rising?

leni

just been reading this! My mortgage is on a discounted trackers which means ever 0.25% rise equated to £16 out my pocket! maybe a fixed is worth looking at! what do you think?

They expect the Bank of England to raise rates even further from their current 4.75%, presenting a good yield for those buying into the pound.

http://news.bbc.co.uk/1/hi/business/5250250.stm

LJD1_2

I've been worrying about this too. Every change means £12 out of our pocket. Does anyone have any good advice?

Graham_Devon

It's only suspisions, nothing more at the moment.

If they do rise though, theres nothing we can do about it, apart from maybe change your mortgage if you can to a fixed one, but you would then be fixed to the higher rate.

It's all just a gamble. The only comfort is that it's not just you it has an effect on, it's everyone with a mortgage! This is why people say first time buyers are stretching themselves to much. It's easy to see a payment of say £500 each month without factoring the potential costs if the interest rate goes up half a percent.

What amazes me if just how much quarter of a percent can make to my mortgage!

BestFootForward_2

The best place to ask is on the Mortgages & Endowments forum. There are some very knowledgable people hanging out there who give fantastic advice.

leni

It makes me so thankful that we got on the property ladder when we did! Our friends and family said 21 was too young, but 4 years down the line, we wouldn't be able to afford the current price of our house, it's almost doubled!!!!!

shame I never bought that £20k house when I was 19 like I wanted to he he [damn]

ZTD

Apologies for the lashed-up graph but it shows even with the last increase, then barring the last couple of changes, interest rates haven't been this low for over 35 years.

For many people that's before they were born.

You need to calculate the interest rate which you can't afford and see how likely that event is going to be.

I'm not going to claim that interest rates are going to go up forever, and I'd bet they'd come down in a recession, but you may have lost your house before that.

Forewarned is forearmed as they say.

Graham_Devon

I don't think many people at all could raise the money if it hit say 10% again.

I know times change and all that and realise wages were a lot lower in the 80's, but can you imagine what a 5% interest rate rise would do to mortgages now because of their high value. 16.7% and I think I would hand my keys to someone and walk away!

Iwantmorecash

Most Mortgagaes Now Are 90%plus In Te Eightys Thsy Were Alot Less

Graham_Devon

Yes and for that reason, even though they were extremely tough times in the 80's I don't think it will ever get that high again. They would be creating too much bad debt for themselves, people would be going bankrupt left right and centre.

Plasticman

If you're struggling to pay these small increases then you need to think seriously about a longer term fixed rate to give yourself some protection. If you can afford it then why worry? If you were on a fixed rate you would be paying more for the privilege anyway.

Broken_hearted

They could tighten up the bankruptsy laws but I don't see how it would help.