One in Five could not afford food if payments rise

movilogo

One in Five could not afford food if payments rise

Then just eat less - simple.Sensible people always keep some allowance for mortgage rate rise. If borrowers have not done that, they are only themselves to blame.

Newspapers articles always present news as a sensation. The heading could have been "One if five could not afford a new iPhone if payments rise" but that would not have caused so much sensation.

RenovationMan

movilogo wrote: »

Then just eat less - simple.Sensible people always keep some allowance for mortgage rate rise. If borrowers have not done that, they are only themselves to blame.

Newspapers articles always present news as a sensation. The heading could have been "One if five could not afford a new iPhone if payments rise" but that would not have caused so much sensation.

I'm surprised we haven't seen headlines such as "Only 1 in 1000 homeowners can afford to buy Beluga caviar!".

It's a national disgrace. :mad:

MonkeyMad

RenovationMan wrote: »

I'm surprised we haven't seen headlines such as "Only 1 in 1000 homeowners can afford to buy Beluga caviar!".

It's a national disgrace. :mad:

It actually means 1 in 5 homeowners might not be able to buy the food they normally do - ie the preprepared extra special lasagne for £3 instead of the homemade version for £1. Seeing as the majority of the worlds population lives on a few bowls of rice per day and a sack of rice is fairly cheap, there should be no need for any of these 1 in 5 to starve unless they want to but that's not good copy is it?

LisaW123

RenovationMan wrote: »

What do you class as low mortgage rates?

I think mortgage rates are low now. 4% interest is not an awful lot. I'm not trying to be provocative and am certainly not gloating about people who might find themselves in difficulties, but I don't see how anyone can complain about a rate of 4 or 5%. Personally, I would budget for an interest rate of about 10% if seeking a mortgage. If you can afford that, you almost certainly have enough slack in your budget to keep a roof over your head if interest rates rocket. That said, I doubt they will go anywhere near that figure in the forseeable future.

heathcote123

vivatifosi wrote: »

Or Stevenage?

I try and avoid it whenever possible, but last time I was there, both Mr Sausage & the fresh donut stall seemed to be doing a roaring trade.

In fact, I think if anything, there were a few too many calories around there.

heathcote123

Loughton_Monkey wrote: »

At the start of each year, I set myself a fixed budget - which is generally last year's plus inflation. I always break it down by month and by expense heading. Of course at this detail, no one figure is ever 'exact', but the point is that I keep a constant watch on it. At the end of each month, I change all the budget figures for January to match actual, making absolutely sure that the 12 month total remains sacrosanct....
..

That sounds thrilling.

RenovationMan

LisaW123 wrote: »

I think mortgage rates are low now. 4% interest is not an awful lot. I'm not trying to be provocative and am certainly not gloating about people who might find themselves in difficulties, but I don't see how anyone can complain about a rate of 4 or 5%. Personally, I would budget for an interest rate of about 10% if seeking a mortgage. If you can afford that, you almost certainly have enough slack in your budget to keep a roof over your head if interest rates rocket. That said, I doubt they will go anywhere near that figure in the forseeable future.

I didn't think you were trying to be provocative. After reading the statement "I can't understand why people would think interest rates would stay so low indefinitely" I thought I'd find out the reasoning behind it.

Step 1 would be to understand your definition of 'low' rates. Once that is established we could move onto whether your statement holds water. For example, if you thought 'low' was anything sub 15% then I'd explain to you why people think rates will stay 'low' indefinitely. If you thought 'low' was anything sub 1%, I'd be very interested to know who believes that rates would stay that 'low' indefinitely.

However, you don't seem to want to qualify your statement and the moment has passed anyway.

Alan_the_skinflint

RenovationMan wrote: »

I didn't think you were trying to be provocative. After reading the statement "I can't understand why people would think interest rates would stay so low indefinitely" I thought I'd find out the reasoning behind it.

Step 1 would be to understand your definition of 'low' rates. Once that is established we could move onto whether your statement holds water. For example, if you thought 'low' was anything sub 15% then I'd explain to you why people think rates will stay 'low' indefinitely. If you thought 'low' was anything sub 1%, I'd be very interested to know who believes that rates would stay that 'low' indefinitely.

However, you don't seem to want to qualify your statement and the moment has passed anyway.

Personally, I'd be ecstatic if I could get through a full 25 year mortgage with an average rate of 6-7%. When I set mine up I made sure I could afford the current rate +5% comfortably - no point spending best part of £10k moving house if you have to sell it again a few years down the line (probably at a reduced price in real terms over next few years if you bought in last 5) because you can no longer afford it due to simple lack of planning.

Some people are genuinely unlucky (extended period of unemployment, illness, unexpected quintuplets etc.) and I have great sympathy with them, but if people are on the limit of their mortgage with interest rates as they stand today (SVR from my lender is <4%) then, IMO, they didn't plan even a little bit realistically.