Low rates are now endangering the economy

ukcarper

Graham_Devon wrote: »

No, as I said, the additional costs will be servicing the loan and also any increased mortgage rate costs.

Given we are looking 5 years into the future to 2018, who knows where interest rates may be. Certainly fixes on help to buy products will have ended. But if they are paying 4% today, it's not particularly outrageous to suggest their mortgage rate could have doubled by the time servicing the loan also hits.

The aim of the thread was to discuss this, as this is what Ros Altman was discussing. Unfortunately, it seems, it's impossible to discuss without having to wade through all the forumonics.

So much so, I'm wondering now what point this board has left as it appears simply to be a playground now.

But if people can't borrow anymore now than they could when rates were 8% or higher and people paid those higher rates why can't they pay them now.

wotsthat

Graham_Devon wrote: »

So much so, I'm wondering now what point this board has left as it appears simply to be a playground now.

I wonder too - all threads are either about, or end up being about, Help to Buy.

ILW

HAMISH_MCTAVISH wrote: »

In other words, you want to raise rates prematurely, because you want house price rises to be slowed.

Would not keeping house price rises around the same as general inflation be a sensible and prudent course for the long term?

Graham_Devon

ukcarper wrote: »

But if people can't borrow anymore now than they could when rates were 8% or higher and people paid those higher rates why can't they pay them now.

Because the people buying now are very unlikely to have been paying those rates in the first place.

This confuses new buyers buying with help to buy with existing owners back in 2007.

Loughton_Monkey

I firmly believe the woman is cleverly campaigning for higher savings rates for us oldies. [Which I, personally, would like, but I would want a more robust economy overall first and foremost].

Her soundbites about dodgy lending are food & drink to journalists, but her 'bottom line' belies a rather curious reasoning...

"I strongly believe the Monetary Policy Committee (MPC) should start gently easing interest rates up now, giving people a better idea of what they can really afford, rather than the illusion of affordability created by current artificially low rates.”

Shall we do the same with energy prices? Already mega-high, they are predicted to get much, much, worse. I therefore propose an extra 15% 'tax' on top so that people have no illusions as to how much they might have to pay back?

People taking out a £400 Wonga loan know what to pay back and when. But they don't fully realise how much it costs if they have to roll it over for a couple more months.... Let's force Wonga to charge 6,000% so they get used to it earlier....

ukcarper

Graham_Devon wrote: »

Because the people buying now are very unlikely to have been paying those rates in the first place.

This confuses new buyers buying with help to buy with existing owners back in 2007.

That is irrelevant if the criteria was the same when rates were higher and people managed people borrowing now can manage.

chucky

Loughton_Monkey wrote: »

I firmly believe the woman is cleverly campaigning for higher savings rates for us oldies. [Which I, personally, would like, but I would want a more robust economy overall first and foremost].

Her soundbites about dodgy lending are food & drink to journalists, but her 'bottom line' belies a rather curious reasoning...

This thread is becoming yet another one to add to the 'cringe' archive.

The [STRIKE]one-man online campaign[/STRIKE] confirmation bias related to any article about interest rates going up is getting funnier and funnier.

Loughton_Monkey

Graham_Devon wrote: »

Because the people buying now are very unlikely to have been paying those rates in the first place.

People who do not understand that their mortgage rate might go up are the same as people who 'didn't realise' that an IO mortgage needs some sort of repayment vehicle. They probably think it's impossible for house prices to go down and may, for all I know, not understand that it's a good idea to insure the bricks & mortar....

If we run a whole economy based on 'educating' these idiots (who shouldn't be buying houses anyway) then we will all be in dire straights.

Show me one single person, just about to buy a house for the first time, who does not realise that one day his mortgage repayments will increase, and I will show you a complete muppet.

Loughton_Monkey

Graham_Devon wrote: »

Silence is worth a thousand words.

True. Very true.

By the way, I'd love to think of you spending the next few months being worth, say, a million words...

michaels

Let me get this straight:

The boomers have stolen the future through high house prices.

We should raise rats so those with savings and retirees (boomers again mostly) can steal the future again through risk free real returns on their savings and increased pension?