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Barclays Mortgage Warning!!
wotsthat
Posts: 11,325 Forumite
http://www.bbc.co.uk/news/business-26336674
I consider the average UK mortgage holder to be in rude good health and well able to cope with such a rate rise (£21/ month). What we need is a counter argument or the BoE might start to think that mortgage holders aren't as frightened and indebted as sometimes portrayed. Luckily Barclays themselves rescue the situation...
Surely that nice Mr. Carney wouldn't raise rates when it would be so dangerous to poor, single parent households. Please Mr. Carney - think of the children!
The bank asked the Centre for Economic and Business Research to calculate the effect of a rise in the bank rate from its current level of 0.5% to 1.25% by the end of next year.
The conclusion was that all UK mortgage holders together would see their gross mortgage repayments rise by just 3%, from £69.2bn to £71.4bn a year - an average increase of £252 per family per year.
I consider the average UK mortgage holder to be in rude good health and well able to cope with such a rate rise (£21/ month). What we need is a counter argument or the BoE might start to think that mortgage holders aren't as frightened and indebted as sometimes portrayed. Luckily Barclays themselves rescue the situation...
But Barclays argues this is a particular danger to the poorest 20% of households with a mortgage, because they already spend more than half their monthly income on repaying their home loans.
Single-parent families with mortgages are also at risk. The research found that they spend 37% of their incomes on repaying mortgages.
Surely that nice Mr. Carney wouldn't raise rates when it would be so dangerous to poor, single parent households. Please Mr. Carney - think of the children!
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Comments
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Several on here have pointed out that rate rises would easily be affordable. Just means the over payments or frivolous spending would need to be reined in.
There will always be a miniority that would struggle.
Diverting spending into mortgage repayments may cause a short term blip in the "recovery" path until it gets recycled through fresh lending or even dividends;)"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Diverting spending into mortgage repayments may cause a short term blip in the "recovery" path until it gets recycled through fresh lending or even dividends;)
£21/ month won't register as a blip even in the short term.0 -
I think the longer rates are kept too low the bigger danger people won't be able to cope. People are stretching themselves for help to buy now at high rates compared to base rates, they are vulnerable.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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I think the longer rates are kept too low the bigger danger people won't be able to cope. People are stretching themselves for help to buy now at high rates compared to base rates, they are vulnerable.
I dont think this is true for most people, i think most people will have put this into their budget, when thinking about a mortgage.0 -
Do rates fo O/O & BTL residential property have to be pegged to base rate?
Why can't they operate independently from it with a separate Home Mortgage MLR?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
£21/ month won't register as a blip even in the short term.
Increase them further, that will improve divends more quickly then:-) Plenty of buyers willing to pick up the repos, even more money to be made and even bigger dividends."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
I dont think this is true for most people, i think most people will have put this into their budget, when thinking about a mortgage.
You would hope so but I suspect history would repeat itself and you'll find out they didn't.
Hopefully they won't find outChange is inevitable, except from a vending machine.0 -
In your scenario (a rise in the base rate from 0.5% to 1.25%) my mortgage payment would go up by around £100 a month. Affordable, but I'd rather not have to pay it. Back in 2008 I was paying £600 a month more in interest than I am now.0
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I think the longer rates are kept too low the bigger danger people won't be able to cope. People are stretching themselves for help to buy now at high rates compared to base rates, they are vulnerable.
Even FTB's (the most at risk?) aren't spending large proportions of income on the mortgage.
When I was an FTB I was always more worried about loss of income than an increase in the mortgage cost. With an income the mortgage will be prioritised and get paid.0 -
In your scenario (a rise in the base rate from 0.5% to 1.25%) my mortgage payment would go up by around £100 a month. Affordable, but I'd rather not have to pay it. Back in 2008 I was paying £600 a month more in interest than I am now.
That's where I'm coming from. An increase in mortgage repayments, for most, however unwelcome would be affordable.0
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