Interest rates will rise faster and higher than anyone expects

peakoil_2

BixWier wrote: »

Why not wait until rates shoot up and then house prices come down to realistic levels.

because I dont believe a few repos will affect the wider house market and so the price I pay per month on my mortgage will be more significant than the price I pay for the house.

Occams_Razor_2

peakoil wrote: »

I think rates will rocket up as fast as they dropped down, thats why I really want to sort myself out with a 5 year or more fix. we just have to find the right house first. been looking all weekend and seen a few but nothing grabs at us.

I would strongly caution against doing anything rash.

interest rates are not going anywhere in a hurry, not with growth and domestic productivity in the toilet.

inflation is largely fueled by external input costs, not domestic demand & growth, therefore there is nothing to be gained by raising rates. in fact it would be harmful.

I cannot see official rates being any higher than 1.5-2% within the next 2-3 years.

we will need to see significant growth and positive results from the austerity measures to even attain those levels.

I'd say wait.

peakoil_2

Occam/s_Razor wrote: »

I would strongly caution against doing anything rash.

interest rates are not going anywhere in a hurry, not with growth and domestic productivity in the toilet.

inflation is largely fueled by external input costs, not domestic demand & growth, therefore there is nothing to be gained by raising rates. in fact it would be harmful.

I cannot see official rates being any higher than 1.5-2% within the next 2-3 years.

we will need to see significant growth and positive results from the austerity measures to even attain those levels.

I'd say wait.

I agree with what you say, but think that rates will shoot up when they start to move. If I buy at some point late this year or early next, with a 5 year or longer fix then I should be safe when rates move in 1-2 years on your timescale.

Occams_Razor_2

peakoil wrote: »

I agree with what you say, but think that rates will shoot up when they start to move. If I buy at some point late this year or early next, with a 5 year or longer fix then I should be safe when rates move in 1-2 years on your timescale.

but they can't move up any faster than growth permits.

they can fall fast, when the bottom falls out because the correct rate is close to nothing.

things can fall much faster than they can grow.