Anyone else sh***ing themselves in case the interest rate goes up on morgage?

new_home_owner_3

ive got 2 mortgages and there both on fixed rates one at 4.35 and one at 4.15% the latter one is a five year deal the other one is three years.

I would have saved loads of money going on a variable rate, but im happy paing the rate i do, personally i dont think rates will go up, it will cost the government to much money.

Ive said it before and ill say it again, by interest rates going up it will force house prices down due to people not being able to pay their banks thus, been forced to sell in negative equity.

now do you really think the government are going to put the rates up so the banks they bailed out never get their money back from people who are in negative equity.

basically by putting rates up they will be making people homeless still owing the banks money, are the banks supposed to just right the money off?

I suppose they could alway ask the government to bail them out again, and then you have the other problem who will have to pay the cost to house these people when the government have made them homeless by putting rates up?

it will be the government again, so until theres any kind if improvement workwise i can not see any rate change.

eschaton

If rates go up, then they will go up, which they will.

Had a mortgage for 11 years and either been discounted variable, offset or tracker. Don't do fixed, I'll take the risk, good or bad.

Currently 1.49% after 23 months on a 4% floor rate. Base rate needs to rise by 2.5% before I am back where I was for nearly 2 years. Now on BR + 0.99% until end of mortgage term and won't be giving that up.

In the meantime, the savings between current rate and 4% are put aside for when needed when rates rise. No need to overpay as savings rates are above mortgage rate.

new_home_owner_3

eschaton wrote: »

If rates go up, then they will go up, which they will.
.

You dont have to be a rocket scientist to work that out...

the big question everyone wants the answer to is when....:cool:

And no one knows that answer, but i suspect even if it does go up it will be a few years before we are back up to the 5 percent mark.

What people need to remember even when rates where 5 percent you could still get good fixed deals well under 5 percent, with the base rate at 0.5 percent and the banks fixing people at 5 percent they are now making a right good profit, and guess where thats going?

yes thats right to pay the bail out from the government.

SilverSix

It seems like a lot of people have counted on interest rates staying low indefinitely which is a little naive.

Even now I as a first time buyer in my very early twenties am well aware that rates will only be going up over the next couple of years and budgeted for this in my affordability and also the size & cost of my property.

Those that haven't taken advantage of this opportunity to overpay or save for when rates rise will be kicking themselves soon. I don't see why somebody would spend money on things that aren't needed when clearing debts should be a priority but I've always been careful and sensible with my money.

My lender explained what each 1% increase in base rate will cost me extra per month, which for the size of my mortgage is negligible.

I think a lot of people are expecting it to really shoot or jump up which won't happen.

shop-to-drop

We are hoping for interest rate rise as hope that then prices will drop to more realistic levels and we will be able to upsize without borrowing an uncomfortable amount.

new_home_owner_3

ive been looking at the tracker rates for first time buyers and its the base rate pluss 4.35 percent making it 4.85 percent for someone with a 10 percent deposit at the the post office.

a mortgage of 100,000 at this rate it would be 575 pound repayment a month, if rates went up tp 5 percent which is not really high on this product they would have to pay 863 pound.:eek:

this is with a fee of 995 fee this mortgage is a joke, who in the right mind would go for this?

no wonder theres no first time buyers about.......

whatyadoinsucka

the only good thing about rates going up (not that it will happen any time soon) is the saving whingers on MSE will be a little more positive.

Unless Base Rate hits 7% in the next year or so, i'll be happy, the mortgage balance is going down by £750 a month, so keep the rate low and my mortgage will be 50% LTV in 2 years.. from 90% 2 years ago..

the only worry in anyones mind should be job losses, if you can't afford to pay your mortgage (if rates go up 3-4%) then you should really start living within your means..

2sides2everystory

BennyC wrote: »

My lender explained what each 1% increase in base rate will cost me extra per month, which for the size of my mortgage is negligible.

I think a lot of people are expecting it to really shoot or jump up which won't happen.

It will if unlike you Benny they are on interest only mortgages and rather a lot of people are on those.

lisyloo

Hopefully those with high savings are using offsets to equalise their mortgage and savings interest and removing the effects of taxation on the interest they were receiving?

err..no way.
I'm paying 1% on the debt and getting between 3% and 10% on the savings/investments.
Why offset?

True. Just thinking about those with a mortgage and savings and who've used up their ISA allowance.

Well as a couple we can save over £21K in ISAs which is quite a lot.
But after that you can consider using your CGT allowance, or if you have > £21K per annum, you could consider pensions for the tax relief.
I also bought some NSI index-linked certificates when they were available, so there are a few options (although they all have pros and cons of course).

elbutre

I am on a SVR which is 3% above BoE rate (so 3.5%)

have not been too worried about interest rates but have started some enquiries to fix my rate at 4.39% with Yorkshire Building Society and this will mean my monthly payments will go up by about £80.

if BoE rate goes up by 1% i will be in the money with this fixed deal, if it doesn't i only stand to loose £80 per month but i am pretty sure that over a 5yr period 4.39% is a good rate (historically since 2002 i have not had a better fixed rate than 5%) so this is quite a nice deal