Interest rate will go up in new year

Cleaver

ninky wrote: »

the daily mail reports. it must be true. we're all doomed!

http://www.dailymail.co.uk/news/article-1340058/Millions-households-facing-hike-rates-200-month-home-loans.html

Y'know, Mrs Cleaver is a bit of an artist and sells paintings and photos. Not quite enough to go full time, but it's an enjoyable and profitable hobby.

I keep saying to her that we should produce some photos that can be used for all sorts of dull news articles, and this photo reminded me of that. She's not keen as she's all about the art, but if there was profit involved it might change her mind. Think there's any money in it or do you reckon that market is already covered?

Sorry, a little bit off topic there...

Cleaver

THE_GHOULISH_CODPIECE wrote: »

What complete and utter nonsense. Why do you ghouls have to cloak this family forum with this rubbish?

I think an article about potential interest rate rises on a forum about the economy is quite valid.

'Family Forum'? You should have seen some of the pictures Mr Broderick used to put up here.

chucky

ILW wrote: »

True, it is purely anecdotal and I could only make a vague guess at the percentage of people who are in this position. Talking to friends of mine, it appears that about half who are on trackers are just going with the good times and not overpaying at all whilst putting the money saved into mainly cars (on finance) and holidays. These may be the only ones in the country doing it, but I somehow doubt it.

I would guess there are figures somewhere about how many are overpaying on mortgages but I have not seen them.

the net lending numbers each month tell you everything you need to know about people overpaying their mortgages

Cleaver

ILW wrote: »

True, it is purely anecdotal and I could only make a vague guess at the percentage of people who are in this position.

I know, you did it a few posts ago.

ILW wrote: »

Talking to friends of mine, it appears that about half who are on trackers are just going with the good times and not overpaying at all whilst putting the money saved into mainly cars (on finance) and holidays.

I'm honestly not just saying this, but I don't know anyone doing this type of thing. Most of my friends have been a bit scarred by the recession and are still either worried about their jobs, worried about negative equity (I'm in my late twenties and a lot of us have bought houses over the last five years) or thinking that paycuts, or at least flat pay, might be a real probability for the next few years. Because of this most are living life as 'normal', but aren't buying cars and going on holidays with the money they are currently saving on their mortgage.

But I have no stats to back that up either, it's just my mates.

Graham_Devon

StevieJ wrote: »

How do you know that?

Look out of your windows. Observe what's going on with co workers.

Observe how spending has gone up this christmas, rather than down.

Not everyone is like it. Probably the percentage falls well in favour of the more sensible. However, there are plenty out there able and willing to spend any mortgage savings on nice stuff.

Pretending these people don't exist is rather silly, considering the massive person debt problem we have in this country, which doesn't appear to be easing. It did start to ease in line with the credit crunch, but I believe the total debt is now rising again.

chucky

Graham_Devon wrote: »

Observe how spending has gone up this christmas, rather than down.

yes you're right. it's only the people who have low mortgage payments are the ones spending.

that's great analysis - no wait...

wotsthat

Look out of your windows. Observe what's going on with co workers.

Well two of us did and reported that we weren't seeing 'many' or even 'plenty' of people spending their mortgage reductions.

sabretoothtigger

there is still QE money in the economy

Im thinking they will put rates up before reversing QE but thats a good point. I guess that might do that, nobody can tell. The best guess is probably they will do nothing or their actions now will be of no consequence and inflation continues up

By the time they do reverse QE bond prices will probably have dropped which I think means it will always be the case they cannot undo all of it

purch

Observe what's going on with co workers

One of my Boys is driving a tractor about, clearing my drive and the road outside.

The £50 I give him will probably be 'wasted' on frivolous expenditure :eek:

Graham_Devon

wotsthat wrote: »

Well two of us did and reported that we weren't seeing 'many' or even 'plenty' of people spending their mortgage reductions.

I'd imagine the balance of the weight falls towards people looking after their money.

However, pretending that people are not spending any savings they gain, is just applying the blinkers.

I'd suggest when interest rates increase, we look at how spending decreases. Then, you can measure it.

However, if people wish to blindly suggest that no one out there is spending the savings made on mortgages, then they would also have to suggest spending in the economy will stay the same when interest rates increase.

I don't think anyone thinks the above....therefore the only conclusion there can be, is that we are spending while mortgage rates are low. The increase in spending, and increase in debt, would suggest this.

Like I say though, wait until interest rates go up, to measure the drop in spending. That will show us what were discussing.