will a nov rate rise affect you?

F_T_Buyer

dougk wrote:

I'm not sure a rise in interest rates will necc. mean renting is a better deal. There is a big chance that a LL will pass the extra costs on. Also I suspect as house prices continue to rise , so will the cost of rent. Given the lack of Council/HA homes (more seem to be sold under RTB than are built) the low cost rental options are fast dissapearing.

Nice argument, but the facts don't support it.

Rent over the past 12 months has increased 2.9% according to the RPI. Yet if rates went to 5% (as is suggested in this thread) the cost of finance would have risen 12.5% over the past 12 months (4.5% to 5%).

This clears shows rents are not in line with the cost of finance, i.e. interest rates. Rent prices are deterimined by the market, not the landlord's greed.

Personally, I think these rent increases are occuring in places like London, where immigrants tend to settle.

Secondly, it could be argued rents are getting cheaper in comparison to income, as wages are rising over 4% yearly.

Poppycat

It will effect me although I only have 10 years left on morgage. I am hopefully changing houses and will get a 20 year morgage although at a better rate than I am getting now ironically with same BS.

F_T_Buyer

Oh, forgot to answer the OPs' question.

I will benefit because I earn interest, rather than pay interest.

Overall and medium/long term, it will be a benefit this country, as it will go some way (not enough IMO) in reducing real living cost inflation. Also, it will mean higher returns for pensions, which we will all depend on at some point in the future.

Debt_Free_Chick

To all those gloating over the increase in interest on savings accounts, just bear in mind that an upward movement in rates on savings generally lags that applied to lending. You are unlikely to see an increase in your interest rate in November - the banks ("deposit takers") may well "do nothing" for a while, to avoid raising rates if interest rates then fall e.g. in January.

In the meantime ... unless you're on a fixed rate, your mortgage repayments will increase, with no corresponding increase in the interest paid on your savings

Mortgage Free Wannabe Board anyone

Debt_Free_Chick

dunstonh wrote:

Wont hit me much at all. Indeed, I would like to see a couple more percent on as that would help create a flood of properties on the market and bring down house prices which would help first time buyers.

I'd love to think that this would happen, but the market has behaved so "contrary to trend/valuation", recently, that I doubt it would happen.

It would also allow me to move into buy to let and buy properties at a lower value and get a much better rental yield.

Yer too late, mate .... too late

Merlin139

It will not effect me with my Mortgage on a fixed rate deal that ends on 27 Jan 07 and last Friday fixed a New 5 year fixed rate deal on a 10 year Mortgage with Britannia with no fees starting 01 Feb 07.

With the amount that we will be over paying each month it will be paid off 1 month after the new fixed rate deal ends in Feb 2012.

moneysavinmonkey

so far 6 of us all for it, 2 will be see negative effects + 3 don't really care either way!

I'll have to pass this on to the BOE immediately.. up, up & away!!

Sapphire

I'd welcome it because it will help my savings - in fact, I'd like the interest rates to increase by considerably more. :T

I've only got a small mortgage (which I am overpaying), so an increase won't affect that very much at all.

Plus I think a bigger interest rate would help cool house prices down, which will be a good thing for all apart from those who have borrowed beyond their means and without the foresight to take into account that interest rates can go up as well as down.

mystic_trev

Short sterling is now pricing in three rate rises by the middle of next year i.e. MPC to raise IR to 5.5%

Also see this

http://www.bloomberg.com/apps/news?pid=20601103&sid=azWr55nygFyE&refer=us

greencat_2

Bring it on! Might even mean the bank will be paying my entire rent (via interest on my savings) before the end of the year. There's a degree of poetic justice to that since it's the actions of greedy banks et al which are making actually buying somewhere unaffordable.

The BoE will be on my Xmas card list if these rate rises keep up.