Anyone else worried about the interest rate rise?

Uniscots97

dips wrote:

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Mortgages went up but so did inflation so the cost of mortgages was eroded as wages rose. Wages will not rise this time to erode that debt.

Probably the only wages that will rise are the fat cats. Read recently of one large company boss moaning as he was 'only' earning £4 million a year! These are the people that get very low interest loans. Not actually the ones who need them.

lush_walrus

Personally, I am not worried, but I can see how some are. The thing that you have to remember is that it is all part of the economic cycle and whether it comes now or in another year or ten it will come and when it does it will help to correct the market.

Changes in the economy as far as I can see have to happen, it really is the only way to cut back on people borrowing through the roof. Sadly, those who already have done that may fall down, but you just have to make sure it isn't you. 5% historically is still very low and I hate to say it, but there will be more rate rises to come, so anyone starting out getting a mortgage or for those who already have one make sure yu are prepared, cut back now, set money aside for any shocks and try to get as much paid off now as possible. That's all you can do.

ZTD

lush_walrus wrote:

Changes in the economy as far as I can see have to happen, it really is the only way to cut back on people borrowing through the roof.

It isn't. You can stop people borrowing by stopping people lending.

You can change this by raising the reserve requirement or by not inflating the money supply. However these are political decisions.

Raising the interest rate is the only thing the Bank Of England can do which is politically independent.

The Government wants a recession (presumably) to calm inflation, and wants the BoE to cop the blame for it.

Hence interest rate is the only weapon that is used.

earwig

im not worried as i am in rented and my debt is on a dmp where intresst is frozen im glad im out of it i would be very worried if i had cc and a mortage right now

the banks need to put the rates up to slow down people spending but people just carry on like nothing happening as i said a few days ago reposecsions are growing each year bankrupcty will top a hundred thousand this year and people what have remortaged to pay of their debts but have built them up again are in a very bad postion right now

the banks are given 5 times your wages to try and keep the housing market afloat where it has been straved of first time buyers houses are not selling for as much as the easte agents are saying there is a website where you can see what houses have sold for (cant rember the name but i will find out and post it later unless some ne else on here knows it and whant to put a link in) and it not as much as they are beeing advertised for a house in our street was up for 185k it went for 161k thats a big differance

unempolyment is on the rise the signs are there its not going to take alot for it all to come crashing down and it wont be to long in the future at least if my oh loses his job the hosing benefit will pay my rent and councill tax and the dss will give us near on two hundred pounds to live on each week which is not a great differance to what we get now once you take your rent and councill tax of makes me wonder why we work

davethecue

I'm not sure when these new rates will hit the statements. Will it be before xmas or after xmas. I think a lot of people will go under over the xmas/new year period. Not sure of how much but I know everyone's heating/utility bills will be the highest they've ever had. Coupled with higher repayments and the traditional festive overspend I think we will have a lot more new members here in the spring

Uniscots97

earwig wrote:

there is a website where you can see what houses have sold for (cant rember the name but i will find out and post it later unless some ne else on here knows it and whant to put a link in) and it not as much as they are beeing advertised for a house in our street was up for 185k it went for 161k thats a big differance

do you mean https://www.myhouseprice.com ? It costs £2 to find out what someone's house went for I think.

lynzpower

you know earwig I could not agree more there.

Where I live is expensive ( inner london!) but its still cheaper to rent than buy. At leasy you can live month by month on a tenancy agreement knowing its fixed. On a mortgage you cant can you? Up it goes and the thing is when mortgages are more expensive ( ie they are more expensive now than say 6 months ago) less people want to buy your house.

Pobby, been here 2 years mate Ive enjoyed living here, Ive had to had no money for doing owt else

Who knows what will happen in the future? You just dont know. But what I do know is that mortgages will get more expensive, and whether i could afford it - would I want to?

lynzpower

nethouseprices.com

Yes, huge difference on there I agree earwig

MikeyB_2

This one's free to use
http://www.ourproperty.co.uk

lush_walrus

ZTD wrote:

It isn't. You can stop people borrowing by stopping people lending.

You can change this by raising the reserve requirement or by not inflating the money supply. However these are political decisions.

Raising the interest rate is the only thing the Bank Of England can do which is politically independent.

The Government wants a recession (presumably) to calm inflation, and wants the BoE to cop the blame for it.

Hence interest rate is the only weapon that is used.

Exactly, but people do not lend, banks do and as we are not a communist country and live where the markets are free to dictate the changes to the economy, changes to the economy are the only way to control spending. The government will not want a recession, but they will want to reduce spending by making borrowing out of the question.