Five million home owners unable to afford interest rate rise

StevieJ

lemonjelly wrote: »

(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?

There are risks for everyone including renters as public sector wages are cut and jobs are lost.

lemonjelly

Fair enough Really2. From my perspective, I don't think that IR rises alone are going to be the issue to tip people over the edge. Their personal debt, disposable income, other household costs, employment status etc and other issues are all going to be relevant...

chucky

lemonjelly wrote: »

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?

if rates would go up you would fix your mortgage and insulate yourself from higher rates in the future.

you'll now say some people can't remortgage. it's not going to be that many, let me explain...

in early 2009 50% of people were on Fixed Rate mortgages - that's reduced because their fixed rate deals have ended. so let's take 60% are on variable or tracker deals now.

10 million mortgages in UK = 6 million people at risk.
8% of people in July 2009 were in negative equity - house prices are now higher than then so these people wouldn't be in negative equity any longer.

but let's take 8% even though it's going to be much less 8% of 6 million = 480,000

the real number isn't 480,000 (as it's much less) but my point is that the story is total nonsense as they're claiming 5,000,000 which is just a lie.

whoever believes this story is deluded and has no grasp on reality

Really2

lemonjelly wrote: »

Fair enough Really2. From my perspective, I don't think that IR rises alone are going to be the issue to tip people over the edge. Their personal debt, disposable income, other household costs, employment status etc and other issues are all going to be relevant...

But that's because you use your brain , I agree with you, I just don't agree with the article and how it was written.
It could have provided a lot more impact had they done some work on it.

lemonjelly

chucky wrote: »

if rates would go up you would fix your mortgage and insulate yourself from higher rates in the future.

you'll now say some people can't remortgage. it's not going to be that many, let me explain...

in early 2009 50% of people were on Fixed Rate mortgages - that's reduced because their fixed rate deals have ended. so let's take 60% are on variable or tracker deals now.

10 million mortgages in UK = 6 million people at risk.
8% of people in July 2009 were in negative equity - house prices are now higher than then so these people wouldn't be in negative equity any longer.

but let's take 8% even though it's going to be much less 8% of 6 million = 480,000

the real number isn't 480,000 (as it's much less) but my point is that the story is total nonsense as they're claiming 5,000,000 which is just a lie.

whoever believes this story is deluded and has no grasp on reality

Be careful dude, you're trying to predict what I'm gonna say...:cool: