Yet another BOE warning shot across over debted homeownerss heads

The_Fox_3

chucknorris wrote: »

Who are these people who have over borrowed? Are you talking about those who bought in 2007? If so by the time the base rate gets back up to 5% something like 6-8 years would have passed, so inflation will have assisted them. Also of course they would have had around 5-7 years of lower rates where they could have paid off some debt.

If you talking about those who bought 2008 onwards then I would suggest that these people will be far fewer in numbers and would also have exercised some caution when buying during arguably the worst part of this recession.

Fine then!!

There should be no problems, we shall see though:)

Batchy

The thing is ... no one would expect anything different 5% base rates would be the long term more recent norm, but historically the norm is actually higher.

What they are trying to do is make sure that people do not take unneccessary risks.

I have a fixed rate, and following that, a tracker, which come at a premium unfortunately. But its more than affordable at 10% rates, so at 5% its not a major concern. It just means the savings I have made of buying now 2010, rather than in 2007 will be even greater.

As I always said, id rather have a small mortgage and a higher rate... much easier to clear earlier, than a high capital value and high rates. Its lower risk! simples.

wotsthat

The_Fox wrote: »

There should be no problems, we shall see though:)

Rather than it being a toss up between the extremes of 'massive' problems for 'many' and no impact at all do you think it's feasible that it might just be somewhere inbetween?

Some people are going to struggle with rates even if they are as low as 5% but maybe not that many.

StevieJ

The 5% was fed to him and he bit, I personally think that 3.5-4% is a more likely neutral level these days.

StevieJ

The_Fox wrote: »

Agree!

But many have over leveraged or borrowed to their limit that this will have a massive impact.
This rise should not hurt anyone, but it will, why do you think rates have been kept this low in the first place.

Why? most people bought their houses at much higher rates, another HPC myth. The reason that rates are low was to fight off deflation not to give mortgage holders an easy time.

The_Fox_3

wotsthat wrote: »

Rather than it being a toss up between the extremes of 'massive' problems for 'many' and no impact at all do you think it's feasible that it might just be somewhere inbetween?

Some people are going to struggle with rates even if they are as low as 5% but maybe not that many.

Hi wotsthat

you have hit the nail on the head.

Most people will cope, they always do, but a good sizable minority will be in pain, and it is amazing how a good sized minority can effect a market.
All the Guys that reply to my OP post know the score in real life, why do you think they are all overstating the fact that "All will be ok", they know it won't:)

Some of the top internet searches at the moment are on interest rate rises, or on house price inflation, WHY?, because they are all concerned.
Most of the letters/articles you read in the media, or posts that you read right here all saying "it will all be alright" are missing something at the end of their articles/posts..... AMEN.
The more some of the posts on this thread

ILW

StevieJ wrote: »

Why? most people bought their houses at much higher rates, another HPC myth. The reason that rates are low was to fight off deflation not to give mortgage holders an easy time.

Inflation seems to be on the up, we never came close to deflation. The BoE have had to wiite to the chancellor for about the last six months explaing why inflation is twice whet they are targetted at. Makes me wonder why these people get such big salaries for doing what anybody could do.

The_Fox_3

StevieJ wrote: »

Why? most people bought their houses at much higher rates, another HPC myth. The reason that rates are low was to fight off deflation not to give mortgage holders an easy time.

Really:rotfl:

It was not to save the indebted then, you believe what you want too then Pal

crazygaijin

The_Fox wrote: »

http://uk.finance.yahoo.com/news/Homeowners-Beware-Rate-Rise-skynews-2288976234.html?x=0

Yet another warning shot!

Homeowners are now being prepared for rises, how did anyone think this temp measure was going to last forever.

What you mean interest rates can go up?

How can we afford our mortgages now, I thought low rates would be around forever?

Pete111

Interests rates to rise at some point from their current level of 0.5%?

Is this uber obvious sentiment the best we can do as a 'new' topic? Really?

Shame on us....