Interest Rate Rise Warning for 10m Households

zappahey

HAMISH_MCTAVISH wrote: »

Oh here we go again....

What I've said, very clearly, is that base rates of 5% would not increase mortgage payments to an unaffordable level for most people.

I suspect that if current margins are to be maintained, as is implied by the article, then a rise to 5% base rates would be significant.

de1amo

gagahouse wrote: »

No change today, expect one in the next 3 months though.

i thought the rate had been increased by 0,25pc or doesnt it affect mortgages what has been announced??

pinkteapot

Reduce your heartfelt concern to cover 9,999,999 households - we're on a tracker and will be fine. Actually, make that 9,999,997 - just seen Running Horse and de1amo's posts.

As de1amo said, have any surveys been conducted of how many households feel they would be in serious trouble following rate rises? Of course you'd expect an increase in forced sales/repossessions with rate rises, and a decrease in consumer spending, but the article doesn't give a lot of colour on the likely extent.

whatyadoinsucka

Quote:
Originally Posted by quantic
I don't really see any benefits of the low rates for most people to be honest, first time buyers at least. Sure the banks are getting a great deal at 0.5% BOE but they sure as !!!! aint passing it on to me.


well i got a 2% variable, as soon as i saw it i snapped it up.. also repaid the lend i got to get my LTV lower to get the rate..
most mortgage holders are not financially savvy. most of my friends are so I'm usually uptodate whats good where

lisyloo

I suspect that if current margins are to be maintained, as is implied by the article, then a rise to 5% base rates would be significant.

It's a good point.
Some people are not paying particuarly cheap mortgages now.
I know my niece has one of those Northern Rock together mortgages with the secured loan.
The LTV is too high to remortgage with the loan and if you take just the mortgage then the secured loan rate shoots up.
Think they are on around 6% so that's a big margin over base.

The increases aren't huge but many people are squeezed already and will be further squeezed by subsequent raises.
Dont' forget people are paying more on fuel and many have lost overtime.

geneer

HAMISH_MCTAVISH wrote: »

Eh?

Looks like a well balanced article, that says exactly what ,any of us on here have been saying for some time.



So many years of ultra-low rates still ahead of us then....

Mark my words, this will go down in history as the best time to have ever had a mortgage.

You mean ultra low base rates of course.
Because a quick perusal through mortgage rates, and they aren't that great if you don't have a tasty amount of deposit or equity stashed away.

Of course it may indeed be a good time to have a mortgage.
Certainly better than 2007 until now.

abaxas

RenovationMan wrote: »

BoE Votes to maintain 0.5% rates for another month.

Oh well, financial armageddon postponed for another month, then.

I wonder if these sorts of alarmist newspaper articles are timed to be published just before the BoE meeting in order to sell newspapers. Nah, surely not!

Actually brought forward a few months.

Inflation is ripping people's ability to service debt apart.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Oh here we go again....

What I've said, very clearly, is that base rates of 5% would not increase mortgage payments to an unaffordable level for most people.

However base rates of 5% would divert consumer spending from other things to interest payments, and decrease business investment, and so hurt the wider economy.

Is there a part of that you don't understand?

Yes there is, as a matter of fact.

You have said for most people it would not be unaffordable.

But then move directly on to the fact that it would hurt the wider economy.

That would hurt jobs, and that would hurt the ability to pay mortgages. You say yourself that anyone who "wants a recession" is wanting people chucked out of their jobs and homes.

You can't seperate the two out and suggest that the economy would go down the pan, but people would still be able to afford their mortgages if rates rose to 5%. The two things are very much linked and you are simply contradicting yourself.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Yes there is, as a matter of fact.

You have said for most people it would not be unaffordable.

Correct.

But then move directly on to the fact that it would hurt the wider economy.

Correct.

That would hurt jobs, and that would hurt the ability to pay mortgages. You say yourself that anyone who "wants a recession" is wanting people chucked out of their jobs and homes.

Correct.

You can't seperate the two out and suggest that the economy would go down the pan, but people would still be able to afford their mortgages if rates rose to 5%.

I never said that.

I noted that most people could afford to pay 5% rates.

To be specific, the 97% of people that were in full time work before the recession and that paid them then, that are still in full time work after it and could pay them now.

If we prematurely raise rates to say two percent, and have another recession, then another percent or two of people will struggle with mortgages.

Not enough for a crash Graham..... But very bad news for the wider economy and the percent or two of people who'll lose their jobs.

The two things are very much linked and you are simply contradicting yourself.

Nope. I'm merely stating facts.

The bears claim that rising rates will make house prices crash. That's false.

It will however create problems for the wider economy and cause an increase in unemployment.

drc

Has there been a rise or not?

The Guardian article starts with "An interest rate rise agreed on Thursday..." but then it says "Most economists expect Bank of England governor Mervyn King to carry a majority of the nine MPC members with him and hold base rates at 0.5%."

Doesn't make sense...