Fed Hike

purch

vivatifosi wrote: »

I think I should start a thread called... oh I dunno, maybe something along the lines of my Interest Rate Gamble Finally Pays Off.

You could always change your username to Loadsamoney, like the old Harry Enfield character and change your sig to "Look at my Wad !!!!"

DiggerUK

Following the media frenzy for a rate rise from the fed, we now have the morning after walk home.

Some of the media analysis does no more than state the bleedingobvious, that the rise happened.
All the considered responses have a cautionary note to them.

I am still trying to figure out how this move finally puts the long crisis to bed, and wakes us in the dawn of a new paradigm.
Answers on a tee shirt please..._

wotsthat

michaels wrote: »

Before you join the insufferably smug club, you haven't actually timed it right until variable rates climb above your fixed rate but don't got so high that you would have been better off with a longer fix...

I don't think you need to time it right to join the insufferably smug club especially if you've had a mortgage for a while.

In January 2009 I was paying 5.48% and pretty happy with that. Then my fix ended at the exact time the BoE started cutting rates so just 4 months later it was at 2.5%. Now fixed for 5 years (4 to go) at 2.29%.

Probably going to get to 25 years with a weighted average of 4.77%. I would've laughed in the face of anyone who said that was even a remote possibility.

I'm as happy as Larry and as smug as anything. I think I qualify for the smug club even if my latest fix is out by a few months or rates don't go up.

Generali

wotsthat wrote: »

I don't think you need to time it right to join the insufferably smug club especially if you've had a mortgage for a while.

In January 2009 I was paying 5.48% and pretty happy with that. Then my fix ended at the exact time the BoE started cutting rates so just 4 months later it was at 2.5%. Now fixed for 5 years (4 to go) at 2.29%.

Probably going to get to 25 years with a weighted average of 4.77%. I would've laughed in the face of anyone who said that was even a remote possibility.

I'm as happy as Larry and as smug as anything. I think I qualify for the smug club even if my latest fix is out by a few months or rates don't go up.

It puts to bed one of the supposed advantages Boomers (boo) had. Yes, inflation reduced the value of the principle sum but the current generation have very low interest rates to pay on the principle.

I'm sure that in 20 years time, people will be moaning about the overprivileged Gen Y that got basically free money shoved at them which has given them this huge advantage in life.

mwpt

Generali wrote: »

It puts to bed one of the supposed advantages Boomers (boo) had. Yes, inflation reduced the value of the principle sum but the current generation have very low interest rates to pay on the principle.

I'm sure that in 20 years time, people will be moaning about the overprivileged Gen Y that got basically free money shoved at them which has given them this huge advantage in life.

Anecdotally: As one who has bought recently, I would far rather have bought into historically high interest rates and lower asset prices, than the other way round.

Generali

mwpt wrote: »

Anecdotally: As one who has bought recently, I would far rather have bought into historically high interest rates and lower asset prices, than the other way round.

Unfortunately it's not a choice one gets to make.

The difference really is that with higher interest rates and inflation, the costs of the mortgage are more front-loaded whereas with a low interest, low inflation scenario costs are spread more evenly (in real terms) over the course of the loan.

It's pretty simple to make loans today look more like the loans of yesteryear: if you overpay on your loan then you are front-loading the costs.

wotsthat

mwpt wrote: »

Anecdotally: As one who has bought recently, I would far rather have bought into historically high interest rates and lower asset prices, than the other way round.

Or even better for us Gen X - low prices and low interest rates. Happy days.

I wonder if members of the insufferably smug club cab get a special MSE badge?

mwpt

wotsthat wrote: »

Or even better for us Gen X - low prices and low interest rates. Happy days.

I wonder if members of the insufferably smug club cab get a special MSE badge?

You should go to open house viewing days with lots of loser FTBers. You could wear the badge and groin thrust your way around the property.

michaels

Generali wrote: »

It puts to bed one of the supposed advantages Boomers (boo) had. Yes, inflation reduced the value of the principle sum but the current generation have very low interest rates to pay on the principle.

I'm sure that in 20 years time, people will be moaning about the over-privileged Gen Y that got basically free money shoved at them which has given them this huge advantage in life.

Although with MMR presumably you would be assessed for affordability based on a base rate of 20% if rates were 15% - don't suppose many would be able to buy even without the slight problem of how much deposit banks would demand in a sharply falling market....plus of course with prices down that much the banks would all be insolvent as their assets (mortgages) would be worth much less than their liabilities (deposits) and despite the fiction that is the fscs compensation scheme actually depositors would lose most of their money - ie their house purchase deposits....

Crashy_Time

michaels wrote: »

Although with MMR presumably you would be assessed for affordability based on a base rate of 20% if rates were 15% - don't suppose many would be able to buy even without the slight problem of how much deposit banks would demand in a sharply falling market....plus of course with prices down that much the banks would all be insolvent as their assets (mortgages) would be worth much less than their liabilities (deposits) and despite the fiction that is the fscs compensation scheme actually depositors would lose most of their money - ie their house purchase deposits....

Nonsense, they know they have to let prices go at some point, why else hike rates and attack BTL? The banks will be bailed through the back door ( surely the last few years has shown that?) and it will be the overleveraged mortgage borrowers who will take the hit. A UK HPC isn`t going to bring down the banks, I don`t even think another global recession will bring down the banks. They will have to wind their necks in a bit and get back to sensible lending, but life will go on.