Interest rate rise likely this year

HOMESWEETHOME

Bantex wrote: »

My rate went up to something like 13% in the mid 90s. The whole country did not go bust though.

Difference then the average home price was 60k

now the average home price is 200k - nearly 4 times

This is when it would go massively BANGGGGG....

Personally don't see BOE rate higher than 3% IN THE NEXT DECADE OR TWO but again thats my opinion - i hope anyways cos I'm on a life time tracker - i suppose i couldn't enjoy this free money since 2009 forever could i

AndyGuil

Bantex wrote: »

Best option for who?

The business. The will aim to maximise profits.

Bantex_2

AndyGuil wrote: »

The business. The will aim to maximise profits.

So using a shortage of a resource to bolster profits of a company should not be discouraged?

AndyGuil

Bantex wrote: »

So using a shortage of a resource to bolster profits of a company should not be discouraged?

It is what happens in business. There is a shortgage, unless the government steps in and hands them money to build then they will manage the supply. It is common across markets. I wouldn't expect oil companies to decide to pump all the oil as quick as possible they manage the supply to make the most profit. They have to build above cost price for a start so falling or stagnant prices are definitely not in their interest. Barratt for example have around 14% profit margin.

wotsthat

kwmlondon wrote: »

I'm on a fixed rate until Jan 2016 with a hefty penalty if I pay it off early.

My rate until then is 4.1%.

I could get another fixed rate now for about 3.1%.

If you were me what would you do?

Tough one. I'd probably stick with it - can't really see 3% 5 year fixes being around in Jan 2016 but would still hope to beat 4% by some way.

Bantex_2

AndyGuil wrote: »

It is what happens in business. There is a shortgage, unless the government steps in and hands them money to build then they will manage the supply. It is common across markets. I wouldn't expect oil companies to decide to pump all the oil as quick as possible they manage the supply to make the most profit. They have to build above cost price for a start so falling or stagnant prices are definitely not in their interest. Barratt for example have around 14% profit margin.

Don't think oil is a great example as the end user price is mainly taxation anyway. Guess it all depends on whether one considers there is a shortage of housing or not and if some sort of regulation or penalty for sitting on land would be effective.

AndyGuil

Bantex wrote: »

Don't think oil is a great example as the end user price is mainly taxation anyway. Guess it all depends on whether one considers there is a shortage of housing or not and if some sort of regulation or penalty for sitting on land would be effective.

True. A regulation or penalty will just push up costs and that in turn will push up prices.

purch

If the Bank raises interest rates in the near future, there is more chance of longer term rates going down, than there is of them rising.

If you have a mortgage you should be applauding the Bank for doing the sensible thing, and ensuring the long term success of the economy and therefore keeping your mortgage rate lower than it might otherwise be if they didn't.

kwmlondon

wotsthat wrote: »

Tough one. I'd probably stick with it - can't really see 3% 5 year fixes being around in Jan 2016 but would still hope to beat 4% by some way.

Thanks, I think you're on the sensible train there, definitely.

If I were to take out a 5 year mortgage now I'd be betting on interest rates going up a lot, if I left it until January 2016 I'd be betting on interest rates not going up much.

I'm going to see my IFA about my options, but I'd not expect them to give any advice on future interest rates - nor should they!

It's all speculation innit?

kwmlondon

purch wrote: »

If the Bank raises interest rates in the near future, there is more chance of longer term rates going down, than there is of them rising.

If you have a mortgage you should be applauding the Bank for doing the sensible thing, and ensuring the long term success of the economy and therefore keeping your mortgage rate lower than it might otherwise be if they didn't.

It depends, if the bank does what it says it will and raises interest rates slowly in a way that we can all plan for then great. If things go very wrong and the bank has to make urgent changes then we're all up the swanee.