have interest rates been too low too long

fewcloudy

Hughesy84 wrote: »

Talking of the low rates.... is there anywhere that shows the rates before the latest bank crash?

Iv only had a mortgage 2 years, so would like to see what sort of rate they were in the boom?

You can see historic Bank of England Base Rates here (not the mortgage rates we were on of course);


http://www.bankofengland.co.uk/boeapps/iadb/repo.asp


fc

woody2234

Mr Carney’s comments suggest the Bank base rate will stay in the two to three per cent range for many years to come — well above the “emergency” 0.5 per cent put in place since March 2009 but still historically low for Britain.

http://www.standard.co.uk/news/politics/interest-rates-will-stay-below-precrisis-level-for-years-bank-of-england-chief-hints-at-davos-9083058.html

regprentice

Martin has written on the same topic in his blog

http://blog.moneysavingexpert.com/2012/03/13/the-uks-mortgage-ticking-time-bomb/

Will be interesting to see what happens to mortgage rates once the boe base rate rises (we dont have mortgage rates of 0.5% ... some people can still barely get 6% )

Carney talks about using tools other than interest rates to constrain house price inflation. So i think we will see lending multiples drop before rates rise....possibly to x4 as a maximum ... then rates will inch up... help to buy will be withdrawn at some point. This will leave a lot of current ftb's unable to remortgage out of the end of their fixes.... that could finally burst the house price bubble.

gazter

Thrugelmir wrote: »

Providing lenders advance mortgages based on sensible policy. Then the situation should be manageable.

We are going to see a major decline in peoples disposable income. A lot of people, myself included found ourselves substantially better off as a result of interest rates dropping from 6 / 7 % to 1% following the crash.

Things are going to tighten if rates go up to the not unreasonable 5% ish base rate. If my current rate went up by 5 points i would find myself out of pocket by £350 a month. A not inconsiderate sum!

Thrugelmir

gazter wrote: »

We are going to see a major decline in peoples disposable income. A lot of people, myself included found ourselves substantially better off as a result of interest rates dropping from 6 / 7 % to 1% following the crash.

Things are going to tighten if rates go up to the not unreasonable 5% ish base rate. If my current rate went up by 5 points i would find myself out of pocket by £350 a month. A not inconsiderate sum!

Responsible lending policies that focus on affordability are already starting to have an impact. Not just on mortgages but unsecured lending as well. Credit reference agencies are switching away from the old retropspective historical data set models. To providing data that scores the likelihood of a borrower defaulting. Interesting concept. Given that mobile phone and utility companies report. All that's needed is Council Tax and Rent arrears to be reported, and the view of an individual will be fairly complete.

Hughesy84

:money:

BillJones wrote: »

Which rate?

The GBP 5y swap rate was about 4.5% in mid 2005, rose to 6.30% in mid '07, and is down at 1.9% right now.

Mortgage rates for around 75-80% mortgages pre the crash?

Whats a swap rate sorry?