MSE News: 'Don't take mortgage SVR hikes lying down'

Thrugelmir

squeeks wrote: »

So I don't think that an increase in mortgage costs naturally translates into an increase in rental costs. The two are not directly related. I would probably argue that rental cost runs a lot closer to tenants ability to pay than mortgage products.

The recent BTL boom was built on leveraging for capital gain .

So there is a direct correlation between a landlords desired rental income and interest costs in the market.

In 1998 there were only 30,000 BTL mortgages now there are over a million.

Credit-Crunched

Thrugelmir wrote: »

The recent BTL boom was built on leveraging for capital gain .

So there is a direct correlation between a landlords desired rental income and interest costs in the market.

In 1998 there were only 30,000 BTL mortgages now there are over a million.

I agree, the BTL boom was based on pure greed and not an ounce of business knowledge.

Buy a house, put in cream carpets, magnolia walls and cheap IKEA furniture, sell at 20% premium.

This was driven by estate agents, easy to obtain credit and greed.

People that have had their fingers burnt I have no sympathy for, the same decisions and commitment in setting up a business should be the same for purchasing a property.

People ploughing their life savings into homes as their pension pot, not giving one thought to what if this unravels...

Now its come to bite people on the a**.

Ah well.

Thrugelmir

Joe_Bloggs wrote: »

I
I have heard that some people buy bonds at interest rates that are below the current inflation rate are they crazy or was it the best deal they could make.

Some people are taking the view that inflation will fall away, heading towards deflation even.

Pincher

So, do people still believe the fantasy that setting BOE rate affects inflation and mortgage rate?

ILW

Thrugelmir wrote: »

Some people are taking the view that inflation will fall away, heading towards deflation even.

It would be nice.

ILW

Pincher wrote: »

So, do people still believe the fantasy that setting BOE rate affects inflation and mortgage rate?

Problem is that once an organisation like BoE lose credibility, anything they do tends to be taken with a pinch of salt. There used to be a time when a chance leaked comment by the governer could affect markets in a faily big way. They have just got it so wrong lately that nobody takes much notice. Missing the inflation targets for two or three years smacks of total incompetence, or impotence.

aquila2009

let these premium prices for not so premium houses fold!

tarmyg

shortchanged wrote: »

Are you saying you can only really afford a 0.5% increase?

Had you not factored in the possibility of your mortgage increasing more than this?

This is what makes me wonder that there are quite a few people who have very little margin for increases on their mortgages.

No and yes I have.

I've been saving the difference since my mortgage reduced with the base rate. I could deal with a bigger increase but if you read what I said, I am simply hoping for no more than a 0.5% increase on my mortgage.

Also, I am not earning as much as I was back in 2007-2009 and I imagine there are many more people who are earning less now so yes, there will be people who don't have a margin for big increases.

piggypack_2

There are many posts on here from people who believe mortgage payers should have overpaid their mortgage or saved lots of money since the base rate was reduced, but am I wrong in thinking that the base rate was reduced to help people continue to afford their mortgage at a time when people (presumably main earners a lot of the time) were being made redundant or being asked to work reduced hours?

I know the reduced base rate has certainly helped me and my husband since we took our original mortgage out in 2006, seeing as I've since been made redundant, and my husband's wage has also almost halved.

suburbanwifey

piggypack wrote: »

There are many posts on here from people who believe mortgage payers should have overpaid their mortgage or saved lots of money since the base rate was reduced, but am I wrong in thinking that the base rate was reduced to help people continue to afford their mortgage at a time when people (presumably main earners a lot of the time) were being made redundant or being asked to work reduced hours?

I know the reduced base rate has certainly helped me and my husband since we took our original mortgage out in 2006, seeing as I've since been made redundant, and my husband's wage has also almost halved.

Good points, I have thought exactly as you have said throughout your post. I assumed the BOE lowered rates to enable people to keep paying their mortgages as they were now lowered, not to encourage overpayment. I think the one's that had enough cash to overpay would be very low in number looking at the mass redundancies that have occurred, wage cuts, no wage rises for 3 years etc ... GOOD POINTS!