Mortgage Rates May Hit 14% Within Two Years

redux

N1AK wrote: »

There seems to be something fundamentally wrong with the whole model of experts and forecasts. People and/or stories with outlier views are seen as more interesting and get more coverage. We know that these are less likely to be true than more moderate views, but the same BS merchants get invited back on TV or to write articles.

The terrible news that is the subject of this thread comes while we're still mired in the worst of the 5 of the coldest winters in 150 years (as predicted in Daily Express, most of the last 7 winters), can anything go right?.

mwpt

michaels wrote: »

It is a tricky one though - If I look back almost every 'mistake' I made was not to go long property sooner or with more leverage - but then I have only really been in a position ot take financial decison of that sort since 1995. In other words past performance is not neccessarily a prediction of future returns......

Well yes. I made the mistake of not buying AAPL in 2001. Or any number of other decisions I didn't take, in hindsight

But for property, I made decisions I thought were right at the time. Only in hindsight do I realise I should have not tried to time the market but rather find a way to hedge against it either way. Staying out of the property market is a big one way bet. Whereas getting in the market can be a hedged bet. Takes sacrifice though. I have (had, may have again) lodgers now that I'd rather not have but it helps pay a big chunk of the mortgage each month.

N1AK

mwpt wrote: »

Well yes. I made the mistake of not buying AAPL in 2001. Or any number of other decisions I didn't take, in hindsight

Mistake is a word I dislike seeing in this context. A mistake is deciding not to call a taxi and driving home drunk if you regret it in future. Getting caught by the police, or killing someone due to your poor driving, doesn't make it a mistake.

Unless you believe that you would have been better off investigating companies in 2001, that you may have spotted some future money makers, and would have beaten the market by doing so then it wasn't a mistake not to get into AAPL

wotsthat

michaels wrote: »

It is a tricky one though - If I look back almost every 'mistake' I made was not to go long property sooner or with more leverage - but then I have only really been in a position ot take financial decison of that sort since 1995. In other words past performance is not neccessarily a prediction of future returns......

Same here but you can't beat yourself up for the 'mistake' of not being able to see into the future.

With hindsight I was too cautious - not because prices went up massively but because I made the mistake of extrapolating the expense of early mortgage payments too far into the future. I'd be in a nice 4 bed detached now instead of a nice 3 bed detached.

If was Mystic Meg then things would be different again.

mwpt

wotsthat wrote: »

Same here but you can't beat yourself up for the 'mistake' of not being able to see into the future.

With hindsight I was too cautious - not because prices went up massively but because I made the mistake of extrapolating the expense of early mortgage payments too far into the future. I'd be in a nice 4 bed detached now instead of a nice 3 bed detached.

If was Mystic Meg then things would be different again.

My guess is you bought when rates were higher and houses cheaper as a multiple of salary. You've benefited from rates coming down and multiples increasing and therefore you were able to pay it down more quickly.

People of today are unlikely to have the same luck. It may happen, but less likely.

So, if you were to make the same decision again today you would be unlikely to have the same results.

wotsthat

mwpt wrote: »

My guess is you bought when rates were higher and houses cheaper as a multiple of salary. You've benefited from rates coming down and multiples increasing and therefore you were able to pay it down more quickly.

People of today are unlikely to have the same luck. It may happen, but less likely.

So, if you were to make the same decision again today you would be unlikely to have the same results.

No, that's not it.

I think I was too cautious and extrapolated the difficulties of the early years of a mortgage into the distant future. 25 years seemed like forever and I couldn't see beyond it - the reality is that it passes in a blink.

Added to that the 24 year old me assumed he'd never get any pay rises to help reduce the impact of the mortgage over time.

Never considered not being luckier or not being able to see the future as being mistakes.

purch

14% is a rate that Mortgage Rates have hardly ever reached, so if you predict them you are, on the balance of probability going to be wrong every time.

TheeMaskedTurnip

2 years till all mortgages paid off. Gud times.

carslet

Bank of Japan slashed interest rates into negative territory today, hence why the FTSE 100 went up, would not be surprised if USA and UK do not think about this.

To the point though I dont think we will see 7% IR never mind 14... going to be a wild ride for next few years I think

westernpromise

I reckon we are not even half way through the era of ultra-low interest rates.