Interest rates at 7%

lynzpower

ukbondraider wrote: »

When rates were down at 4% or even 3.5% why the hell did people not fix their mortgage to the rest of the term?

What was everyone waiting for?

Likewise even at 5.5% now, those that take out new mortgages, why arent they fixing for the term or at least 10 yrs given the climate.

The 7% level wouldnt matter then?????????????????

Dumb a55 brits.

what did you do? was yours fixed at 3.5?

gil13

Not sure what the best long term fix was at the bottom of the market, if it was 4.5% or something then yes in retrospect it might have been a good deal to go for, did the 25 year fixes allow overpayments, I guess that is important to many people. We did a 2 year fix at 3.59 or 3.89% or something during that time, what a deal that was...don't suppose will see that again for some time.

PJD

ukbondraider wrote: »

When rates were down at 4% or even 3.5% why the hell did people not fix their mortgage to the rest of the term?

What was everyone waiting for?

Probably the attractiveness of base rate trackers at less than 4% were far more tempting for some people than long term fixed rate mortgates at around 5.5% - 6% plus

manhattan

ukbondraider wrote: »

When rates were down at 4% or even 3.5% why the hell did people not fix their mortgage to the rest of the term?

What was everyone waiting for?

I was thinking the same??? I would have done at least a 10 year fix, if i was in a position to buy then.

Guy_Montag

Remember in those days people were talking about a new paradigm and that inflation was beaten forever, interest rates were going to stay low forever. :rolleyes:

King_Of_Fools

Guy_Montag wrote: »

Remember in those days people were talking about a new paradigm and that inflation was beaten forever, interest rates were going to stay low forever. :rolleyes:

In fact people were expecting them to go even lower just like they expect house prices to continue going up!

TJ27

A mate of mine in work bought a little house a few years ago, managed to find a 25 year fixed rate and had the foresight to take it. I'm not sure, but I think he got around 5.5 percent. At the time most people thought he was daft.

His wages have now increased a fair bit. He does seem to enjoy himself quite a lot and probably spends his hard earned cash on things that make him smile! He probably doesn't give a toss what interest rates do. I'm sure he's got much better things to get excited about.

BindiBahji

ukbondraider wrote: »

When rates were down at 4% or even 3.5% why the hell did people not fix their mortgage to the rest of the term?

I didn't fix for 20+ years because fixed rate mortgages invariably carry early repayment penalties. And I thought there was a good chance I may have wanted to start a family and move to a bigger place before I was in my mid-forties.

Dead_Eye_Jones

pinkshoes wrote: »

Life is one big game of chance; you win some, you loose some, but in reality, what's the worst that can happen?? Bancrupt? loosing your home? ok, it'll be crap for a while, but it's only money. family and friends are far more important, whether you're living in a palace, or in a council house.

Im with the crazy coloured footwear to be honest. I just think its sad that someone has come to the forum and started a thread that's only purpose is to "scare" people. It doesnt even make a point, it just seems to be laughing at anyone who will be in trouble come higher rates. Im sure it will be justified in some strange way but to me its just a bit odd, makes me wonder why someone would do that. Must be carrying a rather large potato on ones shoulder?

I dont know whether rates will go up or down or whether house prices will go up or down, but then actually neither does anyone else - lets be clear on that. The are plenty of internet sites out there where people have been swearing blind that a crash is round the corner - the point being that they always back it up with definitive evidence and a list of reasons why it has to happen any minute now. People have been doing it for years and years now so forgive us if we now take all this with a pinch of salt. We can all dig up posts on this site from 5 years ago where people have said the market HAS TO CRASH. But it didnt.

Not all markets are cyclical eg limited supply markets. For example, I doubt you'll be picking up a half price Monet in the sales!

As pinky says, anyone who had bought affordably will be just fine. Yep many are overstretched, and they will feel the pain, but thats not everyone - I think we are really heading to a bigger split in society. Those that saved hard and bought, and those that expect a nice family home to be handed to them because life owes 'em.

The good thing with mortgages is that inflation cheapens the debt, you borrow expensive pounds, and you pay it back with cheap ones. The more time that passes the less owners will be worried.

I dont like this house price inflation, Ill make that clear. But just not liking it sadly wont make it go away. I'll let you guys carry on the debate, but anyone expecting houses to become "cheap" any time soon will be dissapointed - prices may drop but there will become a point where BTL yields look decidely attractive again, and that doesnt need as big a drop as you might want to think! Oh well, time will tell.

Meanwhile im gonna get on with life.... cheers pinky

pricedout_1

Dead_Eye_Jones wrote: »

The good thing with mortgages is that inflation cheapens the debt, you borrow expensive pounds, and you pay it back with cheap ones. The more time that passes the less owners will be worried.

That still does not justify a FTB buying at the height of a property bubble.

Dead_Eye_Jones wrote: »

I dont know whether rates will go up or down or whether house prices will go up or down, but then actually neither does anyone else - lets be clear on that.
I dont like this house price inflation, Ill make that clear. But just not liking it sadly wont make it go away. I'll let you guys carry on the debate, but anyone expecting houses to become "cheap" any time soon will be dissapointed - prices may drop but there will become a point where BTL yields look decidely attractive again, and that doesnt need as big a drop as you might want to think! Oh well, time will tell.
QUOTE]

BTL is a factor, but still only accounts for a small percentage of the market. The HPI we have seen over the past 12 years is speculative across the whole market, not just BTL. As you say ... no one really knows where house prices are heading so you cannot be sure that houses won't become "cheap".