Mortgage Rates May Hit 14% Within Two Years

wotsthat

...according to the Telegraph in 2010.

http://www.telegraph.co.uk/finance/personalfinance/7960378/Mortgage-rates-may-hit-14pc-within-two-years.html

The warning comes after a leading think tank warned that the Bank of England may have to increase interest rates sharply – to as high as 8 per cent - to choke off soaring inflation.

http://www.telegraph.co.uk/finance/personalfinance/interest-rates/7957873/Interest-rates-may-hit-8pc-in-two-years.html

Andrew Lilico, chief economist at the influential Policy Exchange think tank, has warned of an interest rate environment not seen since the 1990s.

He said the rise could happen as the recovery beds in and Government measures to stave off a recession lead to an explosion in the money supply.

Mr Lilico also warned of a return to "boom and bust", as ballooning inflation threatens to tip the economy back in to recession in 2013 or 2014.

"Given the constraints of late 2008 and the absurdities of subsequent fiscal, finance and regulatory policy, if we can get away with a recession of only 6.6pc, deflation of only 2pc and inflation of only 10pc for one year, [Bank of England Governor] Mervyn King will deserve a medal," Mr Lilico said.

I wonder if Mervyn ever got his medal.

Crashy_Time

If mortgage rates hit 6% many on here are toast anyway.......:rotfl:

wotsthat

Crashy_Time wrote: »

If mortgage rates hit 6% many on here are toast anyway.......:rotfl:

Many on here will have paid them off before we get to find out if that's a correct prediction.

mwpt

If mortgage rates hit 14% I'd have to pay of a big chunk of equity but I could manage the repayments. I wouldn't sell unless I really had to, because I live in my home.

I'd try to work extra hard and and trade up at the reduced prices though. There would be some sellers around.

My stance is unchanged, ultra low base rates should not have been allowed to feed through into the mortgage market.

Delete33

Debt Collectors would be happy, councils would be swamped with people being made Homeless. This could be Armageddon !!!!!!!!!!!!!!!!!

Crashy_Time

wotsthat wrote: »

Many on here will have paid them off before we get to find out if that's a correct prediction.

Well it depends when they bought, you obviously have a crystal ball though so I won`t argue with you, deflationary forces are not good for big debt holders however.

CLAPTON

surely the nuclear winter will reduce the need for housing especial in London

Crashy_Time

CLAPTON wrote: »

surely the nuclear winter will reduce the need for housing especial in London

A Brexit will do just as well.

michaels

I remember as inflation moved up towards 5% some on here were calling for interest rate rises as the Bank was failing to acheive its mandate.

Those calling for base rate increases now fail to realise how much the fall in inflation has led to much tighter monetary conditions already. In hindsight negative real interest rates of 4.5% should have flashed all sorts of 'buy' indicators in assets - of course buying in a bear market takes big brass ones that most of us don't have.

wotsthat

Crashy_Time wrote: »

Well it depends when they bought, you obviously have a crystal ball though so I won`t argue with you, deflationary forces are not good for big debt holders however.

Pots & kettles.

If it depends when they purchased, and you don't know this either, how can you be sure they'll be toast?

Is there any evidence your crystal ball works better than anyone else's?

mayonnaise

wotsthat wrote: »

If it depends when they purchased, and you don't know this either, how can you be sure they'll be toast?

Because the only reason the more bullish poster frequents this forum is because of FEAR. Can you smell the FEAR?
We're all quaking in our boots because we're over leveraged debt junkies.
Once this debt fueled ponzi bubble pops....mwahaha!!

Or something along those lines.