So, where are interest rates going?

tbourner

beecher2 wrote: »

Can't see that happening, but it is sensible to have a plan of action in order to cope with double digit rates, especially if you're on Northern Rock's SVR and can't leave.

Which is currently 4.79% apparently. I'll just have to hope I get a pay rise and bonus at the end of the year.

Pincher

tbourner wrote: »

Which is currently 4.79% apparently. I'll just have to hope I get a pay rise and bonus at the end of the year.

Be careful what you wish for. Wage inflation feeds overall inflation, which forces the Bank of England rate up. A 1% increase on a £30k salary is £300, but a 1% increase on a £200k mortgage is £2,000.

Henry_P_Chester

I would love interest rates to be 7% or even 15%. My savings are being robbed with inflation a 5.3% and (my) savings rate at about 3%. It is ridiculous when you think about it the money in the banks of savers is being used to pay off the debts of the borrowers.

Not fair

but back to your question. Barclays capital are predicting rates to begin rising in June. But others are saying nothing until 2011. So who knows it just depends on how much longer they can allow it to go before inflation gets out of control.

Also another point to make is that banks get there money from the open money Market. If their costs increase they will pass them on to the borrowers regardless of low base rates. And their costs are increasing hence some lenders upping their fees recently.

In conclusion the only way is up. better for savers very bad for the indebted.

tbourner

I don't mean to offend savers, I know it's my own fault that I am where I am and I'm sure you've all worked hard to get your savings and investments to where they are. But it's annoying that people complain about the interest you're not getting on your savings. You should be thinking yourselves lucky that in a recession you have something to fall back on and you have several notches on your belts left to tighten. I'm constantly worrying about whether we'll have to sell our house at a loss and then have even LONGER to pay everything whilst living in a smaller/worse house (hopefully not a box), with even less spare money.
like I said I know we've brought it on ourselves and you've just been smarter, but I can't stand bad winners who gloat, let alone complaining that you're not winning enough and it's so unfair!!

beecher2

tbourner wrote: »

I don't mean to offend savers, I know it's my own fault that I am where I am and I'm sure you've all worked hard to get your savings and investments to where they are. But it's annoying that people complain about the interest you're not getting on your savings. You should be thinking yourselves lucky that in a recession you have something to fall back on and you have several notches on your belts left to tighten. I'm constantly worrying about whether we'll have to sell our house at a loss and then have even LONGER to pay everything whilst living in a smaller/worse house (hopefully not a box), with even less spare money.
like I said I know we've brought it on ourselves and you've just been smarter, but I can't stand bad winners who gloat, let alone complaining that you're not winning enough and it's so unfair!!

I can understand why you'd think this, but I certainly don't think myself as as a 'winner'. I've simply lived within my means which means I don't have a car, have holidays I can afford and live in a small 1 bed flat. If I'd spent what was flung at me, I'd be in a huge house and in debt, and no doubt happy rates were low. But as it is I feel angry that rates are being kept artificially high, and many others feel the same way

tbourner

beecher2 wrote: »

I can understand why you'd think this, but I certainly don't think myself as as a 'winner'. I've simply lived within my means which means I don't have a car, have holidays I can afford and live in a small 1 bed flat. If I'd spent what was flung at me, I'd be in a huge house and in debt, and no doubt happy rates were low. But as it is I feel angry that rates are being kept artificially high, and many others feel the same way

Yeah it's probably just sour grapes on my part! I've always borrowed to what I can afford to pay (never missed a single payment on anything ever!) but now it's to the extent that if anything goes wrong (rates go up, lose my job, smash car into an uninsured driver etc.) I now realise we'd be in real trouble.

beecher2

tbourner wrote: »

Yeah it's probably just sour grapes on my part! I've always borrowed to what I can afford to pay (never missed a single payment on anything ever!) but now it's to the extent that if anything goes wrong (rates go up, lose my job, smash car into an uninsured driver etc.) I now realise we'd be in real trouble.

You just need a contingency plan and savings to cover all those things. That's why I preferred the 'old days' when you had to plead with your bank manager to get an overdraft, never mind a loan. I'm 42, so not particularly ancient, and this was the norm for me growing up. It is probably why my concept of being able to afford to pay my mortgage meant also factoring in savings to cope with losing my job etc. Rates were 9% when I first got a mortgage, so possibly that's always in the back of my mind too.

ILW

tbourner wrote: »

Yeah it's probably just sour grapes on my part! I've always borrowed to what I can afford to pay (never missed a single payment on anything ever!) but now it's to the extent that if anything goes wrong (rates go up, lose my job, smash car into an uninsured driver etc.) I now realise we'd be in real trouble.

Just noticed your signature, no wonder you are worried.

Pincher

They say a typical mortgage is £200k. I assume such a person doesn't have that much in savings, so lets say £50k in savings. Surely such a person would want the rates to stay low?

Pincher

Thrugelmir wrote: »

Which lenders are going to increase competition in the market place?

In view of the Co-Op five year fix at 3.99%, would you consider that question answered?