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Interest rate pain.

24

Comments

  • thesaint
    thesaint Posts: 4,324 Forumite
    Part of the Furniture Combo Breaker
    Uncle_Rico wrote: »
    Bet your Grandma isn't about to take out a mortgage though is she? I didn't mean to sound like a smart-!!!!!, I'm just tired of reading about people that simply don't have a clue about what they have got themselves into, with regards loans and then blaming other people for it, usually the banks!

    I never said there wasn't a point to the figures being posted. The media regularly tell me lots of things but I choose to find out the facts for myself.


    No my Grandmother isn't about to take out a mortgage, but the OP clearly makes it clear that it is people with an existing mortgage he is referring to.
    Well life is harsh, hug me don't reject me.
  • Uncle_Rico
    Uncle_Rico Posts: 53 Forumite
    thesaint wrote: »
    No my Grandmother isn't about to take out a mortgage, but the OP clearly makes it clear that it is people with an existing mortgage he is referring to.

    Ok, well seen as this is a money saving site, my advice to anyone wishing to save money is learn basic maths!
  • RabbitMad
    RabbitMad Posts: 2,069 Forumite
    Uncle_Rico wrote: »
    Ok, well seen as this is a money saving site, my advice to anyone wishing to save money is learn basic maths!

    You're rather bolshy for a newbie. While I whole heartedly agree with what you're saying I would recommend tollerance unless somebody calls you a numpty ;) (see the house price crash 2008 thread)

    Personally I'm on a 4.5% fixed rate for another year, when I come off that interest rates up near the 10% would cause me some hardship.

    Another good poll generali :T
  • RabbitMad
    RabbitMad Posts: 2,069 Forumite
    Uncle_Rico wrote: »
    What effect would it acheive? It was stated as fact. That's primary school maths. You should have to take a test like that before you are allowed to take out any loan, including a mortgage.

    Do you not agree that it is basic mathematics?

    Not repayment mortgages. Please could you enlighten me with a simple method for calculating the monthly amount for a repayment mortgage given a term of x months.
  • Paul_Herring
    Paul_Herring Posts: 7,484 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    RabbitMad wrote: »
    Uncle_Rico wrote:
    Do you not agree that it is basic mathematics?
    Not repayment mortgages. Please could you enlighten me with a simple method for calculating the monthly amount for a repayment mortgage given a term of x months.
    That was NOT the original question.

    The original question was asking what the increase would be, and would apply to interest only mortgages aswell.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    According to the CML, there is no one way to work out the payments on a repayment mortgage. They do provide an example though.
  • RabbitMad
    RabbitMad Posts: 2,069 Forumite
    Generali wrote: »
    According to the CML, there is no one way to work out the payments on a repayment mortgage. They do provide an example though.

    Oh, so back to my "trial and error" method of picking a repayment amount and projecting forward for the rest of the term. If you've paid it off too early decrease the repayment amount, if you haven't paid it off at the end increase the repayment amount.

    Maybe I'll write a vba app to do this for me today.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    Given the number of people on the Debt Free Wannabe board, I'm surprised nobody at all has chosen the last option. I even very sneakily cross posted.
  • RabbitMad
    RabbitMad Posts: 2,069 Forumite
    Cracked it. Written myslef a little calculator that does the jobby.

    If interest rates go up 1% from 5% to 6% then on an interest only mortgage the repayments increase by 20% where as on a repayment mortgage they only increase by 9%

    Now with my new knowledge I can confirm 10% would mean a serious tightening of the belt
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    I can see a scenario without a huge leap in inflation where SVR could be 9.75%:

    Post #120
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