Five million home owners unable to afford interest rate rise

Really2

lemonjelly wrote: »

I have to admit some suprise at the aggressiveness in responses to this article.

It's not aggression bud it is just the sensationalism.

There is no doubt if rates go up some will get in trouble.
But taking 5,400,000 not thinking of rates going up and turning it in to 5,400,000 will not be able to afford their mortgages was completely wrong IMHO.

If they had properly researched it and came up with figures which matched how many could not afford at what rate I would have commended them.

But instead they used some very twisted logic (well not even logic) to make a sensationalist headline.

worldtraveller

MRSTITTLEMOUSE wrote: »

Anyone who does'nt do this is living beyond their means if they can't afford their mortgage if rates rise and only have themselves to blame.

Unfortunatley the case with huge swathes of society today and that is exactly why I expect huge problems down the road when all the smoke machines & mirrors have been carted away and we get back to something beyond the current fanciful illusion.

marklv

carolt wrote: »

No surprises there then:

http://www.telegraph.co.uk/finance/personalfinance/7718853/Five-million-home-owners-unable-to-afford-interest-rate-rise.html

Well, that's tough. If you can't afford to buy a house you shouldn't buy one. I only bought at the age of 38, with a hefty deposit. Why all this pressure to buy as soon as possible? What we need is more council houses for the lower paid, not an insane rush to buy. The privatisation of council houses was the daftest thing ever done by the Thatcher government.

Really2

carolt wrote: »

How sweetly naive you are - pretty typical of any thread on the board that dares to suggest that everything in the garden may not be rosy for homeowners.

Perish the thought.

I don't get you Carol, do you think 5.4M would be in trouble based on what the article use as their judgment.

No anger was shown to any poster, just disbelief at how the paper came to the figure.

StevieJ

Sensationalist press accepting press release from VI and adding a few bells and whistles, oh for the days when most of the stories were from decent journalists.

MRSTITTLEMOUSE

lemonjelly wrote: »

People tend to become accustomed to living on what they have (but then if circs change, find cutting back difficult). With mortgage payments being relatively low atm, there will be thousands out there who will make financial decisions based upon their current disposable income. If IR's do rise, they will then find themselves overstretched, & potentially struggling.

There's an old saying "you have to cut your cloth accordingly".
So if you have'nt got it you can't spend it and you have to do without.
Surely when times ar hard you pay for the essentials and anything else you forget.
As for IRs if people could afford the rates when they bought at say 5% then why should'nt they afford them if they rise.
Even if you bought on a low fixed rate then you'd have had to be very foolish to have not considered the rise when that fixed term finished.
It's not like 5-6% is even bad for interest rates.
When I was paying a mortgage we had rates of 8% and more.
You just had to manage.

chucky

carolt wrote: »

Five million home owners unable to afford interest rate rise

that would be 50% of all people with mortgages that couldn't afford their mortgage if there was a rate rise...

a little tip for you carol - don't believe everything you read even if it's something you'd like to be the case

chucky

lemonjelly wrote: »

I have to admit some suprise at the aggressiveness in responses to this article.

can't see the aggression but can see why people think it's a total cobblers and innacurate story...

lemonjelly

Fiar enough. It reads as though the responses are pretty forthright, and, erm, strong in their rejection of the article.

Perhaps it is the world in which I exist?

Would there be any agreement that IR rises would cause difficulty for a significant number of mortgagees?

I continue to have concerns about the impact of the personal debt burden (as per my 1st post in this thread), & wonder if households could find things become tighter over the next 12-24 months, with a fair few struggling.

(NB I'm deliberately not giving a figure or % for people to quote, as I'm not expert enough to do so, & don't want to get into a debate about whether 10% would be a blip or 11% would result in shouts of TIMBER! I'm just asking whether there is angreement or not that there are risks to a number of homeowners out there in the near-ish future). If there is such a risk, surely there are gains to be made by being aware & preparing for it? Prevention being better than a cure & all that?

Really2

lemonjelly wrote: »

Would there be any agreement that IR rises would cause difficulty for a significant number of mortgagees?

TBF LJ I have said that on my first and 4th response on here.

The number affected will be mainly to do with the amounts rates rise.

My problem with the article is just how they came to the number, like I said if they did some proper research on it that would have been better but they have done zip (the telegraph that is)
That is why have dismissed the 5.4M in the article forthright because they even show how poorly they came to the figure.

Campbell Robb, chief executive of Shelter, said: “Some 5.4million mortgage holders haven’t even thought about how they will pay their mortgage if interest rates go up. ”