Your prediction on the bank of England interest rate

Dan_Collins_2

I think rates will hover maybe up one down one for a while. They cant go up much more, I am already having to many chats with ppl who cant afford the mortgage they have! Unsecured debt is out of control and if rates go to high the country will fall to bits. Retail is slow and house buying is 38% since the first phase of the HIP's!

Dont want to sound doom and gloom but as the other consultants may or may not agree we are at the sharp end.

swap rates between banks is also higher than the BOE rate which means lenders can only drop fixed rate so much without loosing money!

roswell

lanmonkey wrote: »

So you want interest rates to go up?

That will make morgages prices go up yes? how is that good?

A ) neither.

its not only mortgage rates that go up, Savings rates go up to.

I was asked for a prediction I gave my opinion

NSR2

I think the BOE base rate will stay the same.
In theory the MPC are trying to get inflation to be at around 2%, it was 1.8% last time I heard.

Mortgage rates I think will go through the roof for some people but not others.
So if your sub-prime you are in trouble, otherwise you should be ok.

Having said that with Mortgage rate shooting up, that should reduce inflation, so I guess the BOE may cut rates, but not for a while...

undercoat11

cm233lh wrote: »

So the 4 times you salary you borrowed becomes 6 weeks salary by the time you have to pay it back.

Assuming of course that your salary increases to keep up with inflation. Of course, I forgot, with CPI at 1.9%, there is no inflation so no need for pay rises - yippee.

humfer

I have seen base rate prediction graphs done by financial companies before. Anyone know where they can be found? I'm just about to remortgage and can't decide between a tracker or a fixed rate

luckyfool

Chances are probably 80% hold 20% for a quarter point cut this month.

I would go with a hold this month, nothing ever happens in December, probably a 0.25% cut in February next year. I see rates falling to 5.25% by this time next year and hovering about there for the medium term.

luckyfool

humfer wrote: »

I have seen base rate prediction graphs done by financial companies before. Anyone know where they can be found? I'm just about to remortgage and can't decide between a tracker or a fixed rate

Mortgage strategy magazine (an industry publication) show a graph of swap rates every week. This shows the cost of 1 yr, 2yr, 3yr and 5yr fixed rate money in the financial markets. This is normally the market lenders go to for funding their fixed rate mortgages and give you a good idea of where the market expects rates to go in the short, medium and long term. The most recent issue quotes 1 year money at 6.01%, 2 year at 5.72%, 3 yr at 5.65%, and 5 yr at 5.54%.

luckyfool

poppy10 wrote: »

Not really. High inflation is good for you, as it will mean the value of your remaining debt will be eroded, so you'll be able to pay it off quicker. Plus house prices will fall as a result of higher interest rates.

Your mortgage payments on a £200,000 house at 6% are £1000 per month.
If prices crash, that house may be only £120,000 - so even at 10% interest rates, you'd still only be paying £1000/month, but would have much less to pay overall.

This post made my head hurt.

Peartree

I, too, am interested to know what those in the industry think about where rates are going to go. I'm about to remortgage and don't know whether to go for a tracker or fixed rate.

I understand about mortages rates going through the roof for some and not others. I think I'm probably 'others' with low borrowing compared to equity and a low borrowing percentage compared to my salary. But I don't know which way to go. I can accommodate a fair degree of fluctuation. However, what I'm not sure about is how long I should be tying myself in for at the next remortgage, given where rates are when I'm tying myself in again!

Of course it is, and always has been, a big gamble. However, it seems more so at the moment due to the volatility of the market. It seems to me (disagree by all means) that, when it all settles down, I'm might be the type of customer that should benefit and I'm concerned about losing out because of the timing of my remortgage.

Much of the discussions seem to be around what the current developments mean to those who are 'overcommitted'. I'd be interested to know what the gut feel of those market is as to what it means to the sizeable percentage of us in my situation is? Not sure that this makes the sense I intended it to but will leave it with you!

Dan_Collins_2

Its all down to personal needs, its all very well trying to get one over on the lenders (never really happens) but if you need stability then its not worth risking, I always say to my clients, if they are not sure but could not afford payments to increase then if it goes up you loose your home if they go down you call me and tell me I am an idiot!! i would rather they called me to say I got wrong than to say help I am being repo'd! Then again if you have the movement in your budget then go for it!

A lot is happening in this market, its unstable in some sectors, flats are struggling already, sub prime, specialist and some secured loan lenders are cutting jobs and the credit crunch in the US us getting worse!

I think our base rate should stay still until next year and see what happens. We need stability and I think an increase or a drop would give ppl the wrong idea.

But hey I know nothing!!