Halifax Jan +0.6% MoM -1.8% YoY

Graham_Devon

Rinoa wrote: »

Best keep it for your own ears if you think mortgage fixes are based on current BoE rates.

I never said they were.

I said the price paid were todays prices. I.e. a level at which the bank can borrow the money today to lend to the client, and make a profit on.

What you were trying to imply is that mortgage companies would be at a loss if interest rates rose in the future with a fixed rate mortgage, hence they are happy that interest rates won't rise for a few years. That's nonsense.

ukcarper

Graham_Devon wrote: »

I never said they were.

I said the price paid were todays prices. I.e. a level at which the bank can borrow the money today to lend to the client, and make a profit on.

What you were trying to imply is that mortgage companies would be at a loss if interest rates rose in the future with a fixed rate mortgage, hence they are happy that interest rates won't rise for a few years. That's nonsense.

Is the money the bank borrows at a fixed rate I’m not sure but I don’t think it is, so it must take into account interest rises or else it would soon be losing money on the loan if rates did rise.

IveSeenTheLight

Graham_Devon wrote: »

The timeframe in which rate rises may or may not rise isn't of that much importance to what was being said.

I take it you are going to suggest it could be a long time - and you would be correct. But it's only delaying the inevitable, which actually, one could argue, makes things very much worse.

To be honest, making an assumption from one statement without considering previous examples of when interest rates rose is not ideal research.

You seem to appear to agree that no-one is expectng rates to rise for some time, yet think that once it does so, it will be much worse because of the delay.

I'm intrigued to understand why you think it will be worse and why steps will not be taken in the meantime to mitigate the extent of the issue.

mr_fishbulb

IveSeenTheLight wrote: »

You seem to appear to agree that no-one is expectng rates to rise for some time, yet think that once it does so, it will be much worse because of the delay.

I'm intrigued to understand why you think it will be worse and why steps will not be taken in the meantime to mitigate the extent of the issue.

I can think of one - people will assume that the low level of interest rate is the norm and will not be prepared for an increase in repayment costs.

MrRee_2

The key has always been Interest Rates.

And those rates are going nowhere for at least 10 years - why? Well, because people much cleverer than us are offering 10 year Fixes at 3.99%!

So, there you have it ...... no crash in House Prices.

There is very little stock for sale, and that which is for sale will sell quickly and at asking or above - there is an inevitable climb in prices underway ..... people are fed up putting their lives on hold waiting - and at the same time paying for someone else's property!

Renting and waiting for some mythical fall in prices is a sad, lonely, black place to be .... constantly paying for nothing, losing value on any deposit, watching house prices remaining firm. I can only weep for those caught in such a hard place.

Graham_Devon

IveSeenTheLight wrote: »

To be honest, making an assumption from one statement without considering previous examples of when interest rates rose is not ideal research.

You seem to appear to agree that no-one is expectng rates to rise for some time, yet think that once it does so, it will be much worse because of the delay.

I'm intrigued to understand why you think it will be worse and why steps will not be taken in the meantime to mitigate the extent of the issue.

Have a look around you and have a look at the cases put forward for low rates.

It's all asumptions.

The nation has got very used to, and is now planning their finance around these low rates. I don't take this from anywhere, it was stated on the radio by a "qualified" commentator who is involved in mortgages.

The longer it continues, the more conformtable people get.

Therefore the greater the shock when something does happen.

Would you disagree?

neas

TIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIMMMMMMMMMMMMMMMMMMMBEEEEEEEEEERRRRR

Oh wait wrong thread..

IveSeenTheLight

mr_fishbulb wrote: »

I can think of one - people will assume that the low level of interest rate is the norm and will not be prepared for an increase in repayment costs.

Lets consider that for a moment.

People who bought pre interest rate fall i.e. pre 2008, would be aware of rates at higher levels, indeed they have the opportunity (as many have taken) to continue paying as if rates were higher thus reducing their amortization period.
For those making hay while the sun shines, they still are aware of higher rates, they are still aware that rates can be higher and should be prepared for a return at some point. If they haven't then that's their look out.

For those that bought post 2008, it may be true that they are not aware of higher rates, the longer rates are low, the higher likelyhood that wage increases (wage inflation / promotion) will mean that the proportion of expenditure placed on mortgage interest decreases, thus future rate rises will already be factored in because of higher income.

What percentage of homeowners do you think will not be able to cope when rates rise? Hint, you may want to consider reposession rates when rates were higher.

[Edit]
Also consideration must be given that the opportunity to have a long term low rate fix is there at the moment.
homeowners have the opportunity to fix before rates rise.
[/edit]

Sibley

Where is Brit?

I bet he's busted up bad. hahaha.

mr_fishbulb

IveSeenTheLight wrote: »

For those that bought post 2008, it may be true that they are not aware of higher rates, the longer rates are low, the higher likelyhood that wage increases (wage inflation / promotion) will mean that the proportion of expenditure placed on mortgage interest decreases, thus future rate rises will already be factored in because of higher income.

The wage inflation that is predicted to be lower than inflation this year? http://www.guardian.co.uk/money/2011/nov/08/pay-below-inflation