What will happen when interest rates rise?

padington

Thrugelmir wrote: »

Like the UK a small rate rise will go unnoticed.

A one off small rise not increased again for a long time, isn't much of a rise though is it ?

So it's either going to not rise or hardly rise at all.

Should be called the Amercian dove not the American eagle.

Thrugelmir

padington wrote: »

A one off small rise not increased again for a long time, isn't much of a rise though is it ?

So it's either going to not rise or hardly rise at all.

Should be called the Amercian dove not the American eagle.

Central Banks need to "normalise" interest rates. That's a given. Rise won't be a one off. Even the BOE accepts the fact that people will need to adjust to increasing rates. Been many years since rates were increased at all.

CLAPTON

Thrugelmir wrote: »

Central Banks need to "normalise" interest rates. That's a given. Rise won't be a one off. Even the BOE accepts the fact that people will need to adjust to increasing rates. Been many years since rates were increased at all.

why do banks have to 'normalise' interest rates

katejo

Thrugelmir wrote: »

Central Banks need to "normalise" interest rates. That's a given. Rise won't be a one off. Even the BOE accepts the fact that people will need to adjust to increasing rates. Been many years since rates were increased at all.

I am now at 0.77% and have been since 2009 but have been paying overpayments at the level of a more normal 4-5% rate so that I wouldn't get used to the much lower rate and would have paid off more capital by the time when rates would eventually rise again.

Thrugelmir

CLAPTON wrote: »

why do banks have to 'normalise' interest rates

There'll be another "crisis" in the future. Central banks are out of ammo at the moment.

Thrugelmir

katejo wrote: »

I am now at 0.77% and have been since 2009 but have been paying overpayments at the level of a more normal 4-5% rate so that I wouldn't get used to the much lower rate and would have paid off more capital by the time when rates would eventually rise again.

You've been lucky. Those taking on large 25 year to 40 year term mortgages now might not be.

Mistermeaner

I took a 10 year fix on one part of my mortgage in Jan 2007 at 4.98%

Looking forward to that ending in Jan 2017 so I can default to a lower variable.

Oh dear

Thrugelmir

Mistermeaner wrote: »

I took a 10 year fix on one part of my mortgage in Jan 2007 at 4.98%

Looking forward to that ending in Jan 2017 so I can default to a lower variable.

Oh dear

All about timing and tossing a coin.

Hopefully you are overpaying though. As even that rate is low.

Spidernick

Thrugelmir wrote: »

All about timing and tossing a coin.

I have to agree with this. Years ago we opted for a tracker at 0.19% above base rate, more by accident than design, so have been paying a paltry 0.69% for over six years now.

I have been overpaying: although it makes more sense to save the money in an account paying better interest, psychologically it's good to see the mortgage balance going down and I've found that, whenever I have tried to say money to be used for the mortgage, my wife has found something to spend it on - as such it makes much more sense for me to overpay!

katejo

Thrugelmir wrote: »

You've been lucky. Those taking on large 25 year to 40 year term mortgages now might not be.

True yes I have been lucky. However I have also been sensible in that I have taken advantage of the low rates to reduce my mortgage loan and also improve my house (new kitchen). I could have frittered the money away.