Interest rate rises is forcing us to put house on market

MarkyMarkD

As much as the over-spending, the OP's problem is that they chose a variable rate when they couldn't afford rate increases.

They are obviously a prime case for the novel concept of a fixed rate mortgage. Indeed, it's so obvious that I can't imagine their mortgage adviser didn't suggest the idea.

Then again, perhaps they:

- wouldn't take that advice because the payments would have been £10 a month more at the outset; or
- didn't take advice and simply guessed on what for most people is their most significant financial transaction of their entire lives.

EdInvestor

The other thing you can do apart from switch to interest only from repayment is to extend the mortgage term to say 30 years.

Both these moves will provide short term relief from the pressure.

When interest rates fall, or salaries rise, you can return to the original arrangements.

cells

DawnW wrote: »

This is a bit harsh. Lots of people are in this position. Maybe it is partly their fault, but silly amounts of credit have been easily available for ages now, and interest rates low. People have been encouraged to live like this, IMHO. Maybe the OP is too young to remember a time when the situation was different.

[FONT=&quot]sure, great reason.
We spent a lot because the banks gave it to us, it is the banks fault

yeh right



like someone saying im fat because there is too much food in tescos?[/FONT]

cells

EdInvestor wrote: »

When interest rates fall, or salaries rise, you can return to the original arrangements.

what if interest rates rise and they loose their jobs or their employer says take a pay cut or leave?

eek

EdInvestor wrote: »

The other thing you can do apart from switch to interest only from repayment is to extend the mortgage term to say 30 years.

Both these moves will provide short term relief from the pressure.

When interest rates fall, or salaries rise, you can return to the original arrangements.

I really wish people would use the word if rather than when with statements like the one above.

Granted in the long term its highly possible to wages rise and interest rates fall but in the short term the opposite (no real wage increases, further interest rate rises ) is just as likely to occur.

pstones578

poppy10 wrote: »

Err... no, it was the car loan, extension loan and bank loan (probably used on a holiday or a new kitchen, just like the colourful adverts say) that have crippled you. That and your own stupidity and greed. Sorry, I'd like to be more helpful but I have no sympathy at all. You need a short sharp shock to teach you how to live within your means. It will be better for you in the long run.

I was wondering if anyone else would have comented on that lot. I agree, if you didn't have all that other stuff going on you would have been fine.

MORPH3US

eek wrote: »

I really wish people would use the word if rather than when with statements like the one above.

There is no reason to use an "If" statement, because as the poster correctly states, its a case of when, not if...

I guarantee that one day in the future interest rates will fall and wages will rise....

If EdInvestor had said "in the short term" like you did then it would have needed to be an "if" but he didn't...

Its like all the muppets who constantly say there is going to be a house price crash but don't say when.... its impossible for them to ever be wrong because they just keep saying "it'll happen one day" :rolleyes::rolleyes:

Merton

Dead_Eye_Jones wrote: »

There has been a wave of such posts around many forums. Im not sure if this is a true reflection of whats going on or just people with a vested interest in a price crash trying to scare people.

Good luck with it all

Those with a vested interest in house price inflation have enjoyed a decade of media support, thousands and thousands of hours of prime time TV and the backing of Government and Bank of England policy. I hardly think a few comments on a lesser known forum will make much difference in the face of all that. House prices are cyclical - a crash is well overdue. The more it is artificially delayed, the further it will fall.
To the OP - downsize if you can and get out of spiralling debt.

eek

MORPH3US wrote: »

There is no reason to use an "If" statement, because as the poster correctly states, its a case of when, not if...

I guarantee that one day in the future interest rates will fall and wages will rise....

If EdInvestor had said "in the short term" like you did then it would have needed to be an "if" but he didn't...

Its like all the muppets who constantly say there is going to be a house price crash but don't say when.... its impossible for them to ever be wrong because they just keep saying "it'll happen one day" :rolleyes::rolleyes:

The original poster is already having problems. So lets look at a couple of facts.

Few economists expect interest rates to be cut this year and most expect them to raise at least once again. Many think they have been far too low for far too long and expect them to remain at the current rate or higher for a long long time to come.

A 10 year fixed rate mortgage is a very good indication of what economists expect to be the average mortgage rate over the next 10 years. This time last year woolwich had a 10 year rate of 4.7% (with a minimal application fee). Today that rate is 5.99% but with a £1000 application fee. My 10 year fixed First direct rate is 5.19%. today it is 6.49%. Notice a trend?

Also remember that the average interest rate over the past 25 years is not 5% or 6% but somewhere between 8% - 8.5% and inflation has been relatively benign during that period. Placed together these facts indicate, to me that if is a more appropriate word to use than When if you are hoping for interest rates to fall.

Secondly wage increases are low and compared to RPI (not the bodged CPI index but the old fashioned index that includes food and fuel and is not biased towards every cheaper Chinese imports) people are getting worse off. Even if your wage increases by 5% a year (and in the current economy that is a well above average wage increase) if your mortgage is 25% of your income that 1.25% rise in mortgage rates has probably consumed that interest rate increase and more.

eek

Actually I may be being unfair here. When may be a suitable word. The question is then in what year will this the events the when refers to will occur.

Will that be 2008, 2012 or 2018? and can the poster weather the pain until it does occur?