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Interest rates will rise faster and higher than anyone expects
Comments
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I think it’s becoming obvious to any thinking person as to what has to happen...I’m almost tired of hearing the word bailout all the time. I mean it’s been on the radar screen for the last three years, it never goes away, it just goes from one country to another. Throughout this whole mess that we’ve been in governments and central banks have attempted to extend and pretend the problem.
Sooner or later there comes a point where the funding for these things is not going to be available unless it’s just printed. So far the ECB, the Fed, Bank of Japan have all chosen the printing route. It’s going to be very interesting to see what happens come June 30th when QE2 ends. I sort of think of us all as lemmings just heading over the cliff, and if we don’t know what’s going to happen on July 1st, if you don’t think there is going to be any printing going on then you better be very wary of being in any paper assets.0 -
Graham_Devon wrote: »Well thats a bit of a turnaround to what you were suggesting before.
That is indeed what I was suggesting. That's why I said it.
Hence, you did indeed, take exception to something I never actually stated or implied. Thats the name of the game though. Well done. Played a blinder.
Yes apologies. I hadn't realised that you had taken to stating the bleeding obvious rather than trying to debate or form a conclusion based on the data.
Here's your point..Was simply trying to suggest that while people are overpaying, others are struggling.
That's not a point. It's a statement that would be true 10 years ago, now and 10 years in the future. No point.0 -
If so, those people that are on IO are borrowing one hell of a lot of money, as the amount of money outstanding on IO mortgages is said to have increased by around £60billion since '07 *
http://www.moneymarketing.co.uk/mortgages/banks-cornered-over-mortgage-arrears-concerns/1032596.article
Here's another report based on the same FSA statement.
http://www.newstatesman.com/economy/2011/05/mortgage-payments-interest
It's a little more detailed and has some more numbers to play around with. It also include a reference to the £60bn you refer to. The way I read it is that if usual IO take up rates continued then £35bn would be on IO but it's £60bn i.e. there's an extra £25bn. Still a big number though.In the past three years, the number of borrowers with interest-only mortgages has increased by 369,370 with a value increase of £99bn, according to FSA's statement to the Telegraph. Nearly two-thirds of this increase involved a current homeowner switching to an interest-only mortgage, with only one-third consisting of payment plans for new transactions.
During the same time frame, interest-only loans have risen by 2.91 per cent while their availability fell by 18.1 per cent. The total UK mortgage stock increased from £1.13 trillion to £1.21 trillion. According to these numbers, the maximum increase in interest-only loans should have been £35bn, but the actual number, £60bn, nearly doubled that figure.0 -
Something does seem to be wrong with those figures. Could it be that the percentage is refering to the share of IO mortgages being taken out ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
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the number of I/O mortgages has increased because many people can get at least 3% in a savings account instead of repaying their mortgage at 1.5% - its a no brainer.Something does seem to be wrong with those figures. Could it be that the percentage is refering to the share of IO mortgages being taken out ?0 -
the number of I/O mortgages has increased because many people can get at least 3% in a savings account instead of repaying their mortgage at 1.5% - its a no brainer.
Got any reference for this?
You always ask me for references, or suggest I'm making it up.
I'm suggesting you ARE making this up, and that you have no reference to this in terms of being a large factor for the rise in IO's.0 -
the number of I/O mortgages has increased because many people can get at least 3% in a savings account instead of repaying their mortgage at 1.5% - its a no brainer.
At least 3% in a savings account ?
Really ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
I think it’s becoming obvious to any thinking person as to what has to happen...I’m almost tired of hearing the word bailout all the time. I mean it’s been on the radar screen for the last three years, it never goes away, it just goes from one country to another. Throughout this whole mess that we’ve been in governments and central banks have attempted to extend and pretend the problem.
Sooner or later there comes a point where the funding for these things is not going to be available unless it’s just printed. So far the ECB, the Fed, Bank of Japan have all chosen the printing route. It’s going to be very interesting to see what happens come June 30th when QE2 ends. I sort of think of us all as lemmings just heading over the cliff, and if we don’t know what’s going to happen on July 1st, if you don’t think there is going to be any printing going on then you better be very wary of being in any paper assets.
When asked the discontinuation of QE Sprott said, “I think it’s becoming obvious to any thinking person as to what has to happen...I’m almost tired of hearing the word bailout all the time. I mean it’s been on the radar screen for the last three years, it never goes away, it just goes from one country to another. Throughout this whole mess that we’ve been in governments and central banks have attempted to extend and pretend the problem.
Sooner or later there comes a point where the funding for these things is not going to be available unless it’s just printed. So far the ECB, the Fed, Bank of Japan have all chosen the printing route. It’s going to be very interesting to see what happens come June 30th when QE2 ends. I sort of think of us all as lemmings just heading over the cliff, and if we don’t know what’s going to happen on July 1st, if you don’t think there is going to be any printing going on then you better be very wary of being in any paper assets.”
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copy & paste is your friend.0 -
the number of I/O mortgages has increased because many people can get at least 3% in a savings account instead of repaying their mortgage at 1.5% - its a no brainer.sorry dervprof that's complete rubbish, 0.5% is the base rate and the average mortgage rate is around 4%ish.
It's you who is the no brainer, chucky.
I await your genuis response that will somehow explain this.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
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