Petrified FTB

sinbad182

Where have the interest rates rise fears come from?

I thought that Mervyn King, the Bank of England fella, said that they'd most likely saty low for a few years? Or has something happened since?

blackshirtuk

sinbad182 wrote: »

Where have the interest rates rise fears come from?

Daily Express headline Monday, lots of could, might and possibly. by some think tank.

NyimaR

sinbad182 wrote: »

Where have the interest rates rise fears come from?

I thought that Mervyn King, the Bank of England fella, said that they'd most likely saty low for a few years? Or has something happened since?

If you look to the right of this post and up a bit, in the MSE News section there's an article about it!

Richard_Webster

8% is nothing - 20 years ago it got up to 15.4%!

hermum

OP, how much rent are you currently paying? Even at 8% the mortgage would often be cheaper or not much more. My daughter's paying £825 rent on a 2 bed house, if she doesn't buy she'll still be paying rent in 25 years, whereas if you bite the bullet & buy, hopefully in 25 years that's it.

kaya

if it was in the newspaper it must be true ..................................

tyllwyd

My personal view (and that is all it is!) is that rates were steady at 4 - 5% for quite a few years, so that is the level that they are likely to be aiming for longer term. I'd be amazed if rates shot up to 8% in the short term, so your personal circumstances are likely to have changed quite a bit if that ever did happen - you might have moved, remortgaged, extended the mortgage term, got a payrise/lost your job etc etc - so in a way it's too uncertain to plan for. Your best insurance plan is to save if at all possible, and certainly avoid running up other debts like credit cards, which are likely to be at interest rates way above 8% in any case.

If you want to check repayments at different interest rates, just play around with some figures in a mortgage calculator, there are loads around.

queenA

Hermum-We are currently paying £500 rent but only because it's my uncles house. We would have had to move in the next 18 months anyway as his son will move in.Plus the whole house is really old and needs doing up- but as the rent is low- my uncle wont touch it! Basically it's affecting our quality of life living in not a very nice house, and the plan was to save as much as we could and move on. Our new house-to-be is lovely as well. I'd I think a fixed rate makes total sense neas.
Cashbackproblems -we live near ikea Leeds in a popular area where good houses get sold very quickly

& thank you antkatden- I just need to remind myself that this is the best move for our whole family at this point in time

Thank you all for taking the time to respond

leitmotif

queenA wrote: »

We have joint salary of £55k so hopefully if we budget carefully we can get through hard times if they do arrive sooner rather than later.

8% is NOT 'hard times'. Base interest rates of 5.5% -7.5% were the historical average between 1992 and 2001. Between 1978 and 1992, the base rate fluctuated between around 7% and nearly 15%, and they were above 10% for most of that period. This is base rate. What your lender may offer could well be higher. Trackers might protect you in the short to medium term, but ultimately you won't pay any less. Over a 25-year mortgage you should at the very least assume that the average rate could be around 8-9%. Assume anything less and you could be in for some genuine 'hard times'.

My advice is be sensible. The only reason you have been waiting so long to buy is because prices are overinflated. They won't fall as long as there are people out there prepared to cave in and overstretch themselves.

This is invaluable:
http://www.bankofengland.co.uk/statistics/rates/baserate.pdf

Contessa

Richard_Webster wrote: »

8% is nothing - 20 years ago it got up to 15.4%!

Just been going through some very, very old papers and found mortgage statements stating just that. They went up very quickly, then steadily fell, IIRC. We were very worried at the time but things got better.