Trevor Mcdonald: Monday 8.00pm

bonnie_2

Mortgage misery
The price of getting on the property ladder, as interest rates rise next month and figures show that hundreds of thousands of people are at risk of losing their homes because they can't keep up with their mortgage payments.
Is this fact or fiction, or are the media hyping everything up again. What is the actual interest rate going up to.

themaccas

How can they predict the interest rise is going to go up? There is no change at present.

System

Do the laws of physics extend to property markets? What goes up must come down! We sold our house in 2001 and cleared £30,000 and all this went to pay off first plus. Since then the house we sold has increased another £40K. Surely this level of increase cannot be sustained? I for one hope so - otherwise I dont know how, at present I will get back into the housing market. Lottery maybe?......

Megatimbo

Hello Themaccas,Interest Rates are expected to raise another quarter percent in November due to the bank of england meetings which occur every month,but are voted on when they have the data which decides whether to raise or lower or remain static Nov is the decision month.
All the financial wheeler dealers are predicting are raise of a quarter percent but its not 100 per cent certain
Regards Megatimbo

bonnie_2

But surely a quarter of a percent rise isn't going to push people in to repossesion, how much money does this equate to in real terms.
Would they be stupid enough to do this a month before christmas spending hit's the shops and cause economic misery as well.

njwd

I think .25% equates to a monthly increase of ~£16 on a £100,000 mortgage.

It isn't much, but I think the emphasis of the program is that people have stretched themselves so hard to get a home and most other bills (energy, fuel, c.tax etc) are increasing faster than wage inflation that as interest rates go up, folk are tipping over the edge.

rog2

bonnie wrote:

But surely a quarter of a percent rise isn't going to push people in to repossesion, how much money does this equate to in real terms.
Would they be stupid enough to do this a month before christmas spending hit's the shops and cause economic misery as well.

Unfortunately most people push themselves to the absolute limit, when taking a mortgage - often, they do not take into account things like council tax and water charges, leave alone the unexpected pregnancy - so many people are indeed struggling to meet their monthly mortgage payments.
They are continually being asked to pay more on fuel - gas and electric, yet we are told that we have a low inflation rate - so £16.00 can easily be the straw that breaks the camel's back.
Also - yes they would be stupid enough to increase interest rates just before Christmas, or worse still, just after Christmas, when everybody is spent out.
I think that the only time you will see interest rates fall significantly will be in the six months before the next general election - making a complete mockery of the independence of the Bank of England.

Me_Myself_2

A 0.25% rise is just over £20 per month.

ZTD

rog2 wrote:

Unfortunately most people push themselves to the absolute limit, when taking a mortgage - often, they do not take into account things like council tax and water charges, leave alone the unexpected pregnancy - so many people are indeed struggling to meet their monthly mortgage payments.
They are continually being asked to pay more on fuel - gas and electric, yet we are told that we have a low inflation rate - so £16.00 can easily be the straw that breaks the camel's back.

There's this. I'm also looking for a news story which said that X% of people couldn't afford to pay even £20 extra a month.

rog2

ZTD wrote:

There's this. I'm also looking for a news story which said that X% of people couldn't afford to pay even £20 extra a month.

Quite frightening - should be compulsory reading material for anyone contemplating a mortgage.

Bogof_Babe

Me_Myself wrote:

A 0.25% rise is just over £20 per month.

I'm afraid that is meaningless unless qualified by stating the amount borrowed.

Interest rate rises are good for savers though, and these people will be well placed to keep the economy afloat by spending more.