BoE warns of risks of rate rises.

robmatic

wotsthat wrote: »

Looks like the ideal vehicle for those who are paralysed by the fear of rates increasing. 5.39% doesn't look too expensive for guaranteed peace of mind.

5 year fixes seem pretty cheap just now as well. I just fixed at 2.99% for five years which seems like good value insurance against the prospect of rates going up by a hundred basis points or so.

MacMickster

We really do need rate rises to get back to normal levels as quickly as possible. We have created a zombie economy, and until we act decisively to get rid of the dead wood we won't be in a position to begin to recover.

Yes there will be casualties along the way, and it certainly won't be pretty, but we won't ever recover unless we take our medicine.

HAMISH_MCTAVISH

MacMickster wrote: »

We really do need rate rises to get back to normal levels as quickly as possible. We have created a zombie economy, and until we act decisively to get rid of the dead wood we won't be in a position to begin to recover.

Yes there will be casualties along the way, and it certainly won't be pretty, but we won't ever recover unless we take our medicine.

Thankfully the powers that be have a somewhat more balanced and economically literate viewpoint than you do.

MacMickster

HAMISH_MCTAVISH wrote: »

Thankfully the powers that be have a somewhat more balanced and economically literate viewpoint than you do.

The powers that be seem determined not to learn from what Japan have gone through (and are still going through).

They have effectively become trapped by their low interest rates, which brought about deflation, and a shortage of demand.

Do you really think that zombie businesses and zombie households are going to lead the way out of this situation given enough time?

Now is the time to both think, and do, the unthinkable.

chucknorris

MacMickster wrote: »

We really do need rate rises to get back to normal levels as quickly as possible. We have created a zombie economy, and until we act decisively to get rid of the dead wood we won't be in a position to begin to recover.

Yes there will be casualties along the way, and it certainly won't be pretty, but we won't ever recover unless we take our medicine.

No thanks, I'm making an extra 29k a year with rates where they are. Obviously I realise eventually they will go up, but right now it is the best that it has ever been for BTL (which makes me laugh at all posts about 'the end of BTL') and I would like a few years more out of it before we have to return to normal profits.

shortchanged_2

chucknorris wrote: »

No thanks, I'm making an extra 29k a year with rates where they are. Obviously I realise eventually they will go up, but right now it is the best that it has ever been for BTL (which makes me laugh at all posts about 'the end of BTL') and I would like a few years more out of it before we have to return to normal profits.

Come on chuck we are well aware that you bought many of your BTL properties well before the boom so probably had them for a song compared to todays prices.

Many of todays BTL'ers are highly leveraged and are at much higher risk if rates rise.

chucknorris

shortchanged wrote: »

Come on chuck we are well aware that you bought many of your BTL properties well before the boom so probably had them for a song compared to todays prices.

Many of todays BTL'ers are highly leveraged and are at much higher risk if rates rise.

I am making very good profit on a house that I bought in 2008 (at a price agreed just before the crash), rent is £13,800 and the mortgage is £1,745 per annum.

Edit: capital value is slightly higher then when bought.

System

Mr._Pricklepants wrote: »

and start preparing for any future potential rises from day one.

.

That's obvious isn't it?

I'm a business thinking of borrowing a lot of money in order expand. I tot up all the costs, making a generous allowance for things costing much more than planned, and I likewise make projections about my income stream. I take a very realistic view of that as well.

Somewhere in those figures will be the rate of interest I am charged. I realise I am going to have to go on paying off debt for probably 10-20 years, during which time anything might happen to interest rates. Remembering that in my lifetime 10% has seemed low at one time, I am not taken in by apparently low rates at present. So I don't really care what happens to them in the short term, I assume the worst.

Having analysed the worst case scenario, reckoned the scheme is still a goer, and being confidant about the overall economy, I decide to go ahead.

shortchanged_2

chucknorris wrote: »

I am making very good profit on a house that I bought in 2008 (at a price agreed just before the crash), rent is £13,800 and the mortgage is £1,745 per annum.

Edit: capital value is slightly higher then when bought.

So is that about a 50K IO mortgage on a property that is earning you about £1100 a month?

Yup, fair play, a pretty good return.

chucknorris

shortchanged wrote: »

So is that about a 50K IO mortgage on a property that is earning you about £1100 a month?

Yup, fair play, a pretty good return.

Its about (sorry can't be bothered to check, but it won't be more than a few k out) a 190k mortgage IO.

Edit: There were a lot of good tracker deals about at that time, and I always took tracker deals (for years) not the other headline low interest rate deals available.

Edit 1: Wow Both Federer and Nadal both out of Wimbledon and both were in Murray's half of the draw (not to mention Tsonga also).