Nationwide UP 0.6% MoM & UP 0.9% YoY

JonnyBravo

RenovationMan wrote: »

LOL, I almost missed this. Can you show how this works mathematically via an example for both food and mortgage costs? I'm especially interested in seeing how 1% can equal 50% (or more).

Well I can help you out here RM.
For example Really2 has a BOE tracker plus 0.49%. It's discussed before.
If base rate goes from 0.5% to 1.5% his mortgage rate will go from 0.99% to 1.99%.
That's as good as a 100% rise.

Now, of course, I'm not suggesting anyone seeing that kind of scenario will be struggling at 1.99% but I am just showing you how what Graham said is at least possible.

wotsthat

RenovationMan wrote: »

LOL, I almost missed this. Can you show how this works mathematically via an example for both food and mortgage costs? I'm especially interested in seeing how 1% can equal 50% (or more).

I know. I know.:j

A 1% increase in mortgage rate can double your mortgage costs if you're on an interest only mortgage and your rate doubles from 1% to 2%.

It could more than double if the initial mortgage rate was less than 1%.

This is why I advised Graham to leave the %'s alone and stick to pounds and pence.

EDIT: That's a 1% doubling mortgage costs - missed that it's 50% increase in costs with 1% rise in rates.

EDIT: If you go from 2% to 3% on IO then monthly payments will go up by 50%.

RenovationMan

JonnyBravo wrote: »

Now, of course, I'm not suggesting anyone seeing that kind of scenario will be struggling at 1.99% but I am just showing you how what Graham said is at least possible.

Are you so sure they won't be struggling? I have it on good Bear authority that everyone now thinks that BoE rates at 0.5% are the norm and so a hike upto the giddy heights of 1.5% would be incomprehensible!

Clearly, given the new paradigm, anyone on such low rates will not be paying down their mortgage with glee but will instead be getting huge car finance loans for Ferrarri's and will be filling their credit cards with designer clothes purchases. An increase in rates will decimate these spendthrifts and will result in the reposession of countless millions of properties!

Graham_Devon

Hehe, you both having fun with the conundrum?

It's quite simple really. You were talking about costs and confusing a cost increase with a base rate increase and comparing the two and suggesting costs had gone up 1% for both. 1% increase in costs for the mortgage and 1% increase in costs for food.

That's (quite simply) not the case. Your mortgage costs have gone up considerablly more than 1%.

DervProf

JonnyBravo wrote: »

It was reasonable and clear but I'm not sure what you're suggesting people do.
As wotsthat/RM have pointed out, you really can't plan for unknown legislation.
As for, is it far fetched? Well yes I think it probably is a little far fetched, but I agree it's not an impossibility.

BTW yes I agree RM was mocking but we all "mock" occasionally and his comments wouldnt have been too untoward except of course your history. Perhaps he should have been more mindful but hey dont let this spiral again.

-sigh- too late JB, too late

I wasn't suggesting that people do anything, I was simply pointing out that RM was making an assumption that his gains from property would be tax free in 25 years time.

I agree, that it seems fairly unlikely that he'll have to pay any tax on the money he may have gained (although buying the smaller place will probably incur stamp duty). We all know that the tax system changes regularly, and my experience is that the government will get the money they need from tax payers one way or another. Gordon raided pensions a while back. He also was very generous towards small businesses who became limited, only to withdraw that little gift a few years later. So anyone saying "it'll be TAX FREE" in 25 years time ought to remember that things do change.

As you say, it may be a little "far fetched", but it isn't impossible that some sort of tax may be placed on property.

Oh, and I never predicted that an asteroid (or slightly smaller cosmic body) would land on RM's house. That's just another one of his exaggerations.

Because we don't know what will happen in the distant future, shouldn't prevent us from making plans for the long term. On the other hand, because a lot can happen in the long term, it is a bit silly to make big assumptions. Build them into your strategy, by all means, but remember that the only constant thing in life is change.

DervProf

Graham_Devon wrote: »

For pensioners, renters, those reliant on benefits, anyone who is on a fix, anyone who has paid off their house, a rise in base rates won't effect their outgoings.

Actually, it may well decrease their outgoings.

Listening to Radio 5 earlier, they were discussing petrol prices. It was mentioned that crude has been more expensive a few years ago, but due to the value of the £ v the $, our £s are not buying so much oil as they used to. I`ve always thought that higher fuel costs lead to high prices on most of the things we buy.

DervProf

RenovationMan wrote: »

An example of DervProf's financial planning:



:rotfl::rotfl::rotfl:

That was an option, but I eventually decided to pay off my mortgage early, save a decent lump sum, start a private pension plan at a young age and develop a habit of not relying on debt. I have about 15% of my money in the markets, the rest is in a couple of bonds and cash ISAs.

wotsthat

Graham_Devon wrote: »

Hehe, you both having fun with the conundrum?

It's quite simple really. You were talking about costs and confusing a cost increase with a base rate increase and comparing the two and suggesting costs had gone up 1% for both. 1% increase in costs for the mortgage and 1% increase in costs for food.

That's (quite simply) not the case. Your mortgage costs have gone up considerablly more than 1%.

Yes a 1% increase in mortgage rate may well, say, double mortgage costs in £. That conundrum's been solved.

I don't think I'm confusing anything but when a 1% increase in mortgage rate can, if current rate is 1%, be the same as saying a 100% increase and these terms are used interchangeably in the same post your logic can be difficult to follow.

Can you provide the worked example?

DervProf

RenovationMan wrote: »

This might explain why DervProf has lived in the same FTB house he purchased in the 1990s and has savings and investments that have zero returns. Proof again that being overly cautious can be as damaging to your finances as being overly adventurours.

Thinking about this earlier.

You`ve mentioned this "same FTB house" before (I suspect as an attempt to discredit me in some way).

I have explained before that my parents are still in their "FTB house" after ~50 years. One of my best friends, who is a few years older than me, is still in his "FTB house". I have been to several clients who are still in the first house they bought, and have been there longer than I have been here. I sometimes work with a 27 year old that still lives with his parents, and I certainly don't look down on him, or mock him. Another friend's "children" are in their late 20s, and have only recently moved into rental property. It's pretty odd that you seem to suggest that this is some sort of failing.

Jimmy_31

wotsthat wrote: »

I'd ask you the same question as I've asked a few people lately. What are YOU doing about it? You have no doubts that the game is rigged yet as far as I can see the only thing you are doing is waiting for the kids on your estate to kick off. Then what?

I'm playing the only game in town and doing the best I can for myself and family.

Taking the legal route obviously.

Im currently giving my local MPs as much 5hit as i possibly can till they make the right choice and expose the corruption. (They wont because they are profiting too much from it)

Dave the PM keeps on fobbing me off with a letter from his secretary, saying the question i asked is nothing to do with him and another department will contact me to fob me off with a letter that doesnt answer the question i asked.

Grant schapps is just an ignorant to55er.

Im running out of people to mither now as they are all blatantly in on it.

I predict i will end up getting a bit of mither myself when i buy my first house and refuse to pay the council tax over any number of reasons.

I have told all the people i know to inform themselves of what is really going on within our government and banks, lots of them did, and now "get it". These people are now very unhappy that they are having the pi55 taken out of them by the government and banks.

These people are now doing the same as i have done.

There are lots of people demanding answers and not receiving any.

First stage is to get myself some shelter, i have to buy this shelter because my council said i wasnt allowed to build a house on a piece of derelict land, because i didnt own it.

Apparently i cant use a tiny little bit of the planet i am sat on because somebody in a suit said thats how it works:rotfl:

If this country was now in the same state greece is in, would you stand up and be counted ? or would you keep your head down and hope it blows over.

What are YOU doing about it.

Mock me.