Interest Rates going back up to normal levels again?

Thrugelmir

triathlon wrote: »

That's fair enough, and you then have to wonder why people stretched themselves that much. But still not much of a worry for the vast majority

Weren't you around pre 2007? Facts are all public knowledge. No surprises.

There's a significant number of interest only mortgage holders with no 100% repayment plan. Every rise chips away at their ability to reduce their capital balance. UKAR the rump of NR and B&B still has 139,000 customers some 10 years later.

triathlon

Thrugelmir wrote: »

Weren't you around pre 2007? Facts are all public knowledge. No surprises.

There's a significant number of interest only mortgage holders with no 100% repayment plan. Every rise chips away at their ability to reduce their capital balance. UKAR the rump of NR and B&B still has 139,000 customers some 10 years later.

You are just making endless points that enforce everything I say. Yes I was around pre 2007, those mortgage holders who had rates in excess of 6% and would have gone under were saved, 10 years later, like you say again, and they are still saved and better, most have made huge gains. Yes there are too many interest only mortgages out there, but should they cause a possible you watch the mis sold claims creep up.

This or any other government is not going to allow the housing market to fall, end of story, stop grasping at straws.

Crashy_Time

chucknorris wrote: »

But the thing is Crashy that although the party of low interest rates might end soon, it will have lasted over 10 years! People like you, who substantially stored their wealth in cash, and actually lost out on one of the biggest windfalls ever (it has made us many £100k's on top of normal decent profit). It isn't the start of something bad, it is the start of a return to normality from something fantastic for those (not you) who were already invested. You lost out, big style!

Don`t know about you, but most people need a buyer, and somewhere else to live, to realise these gains, for many it is just fantasy/paper "wealth".

Crashy_Time

triathlon wrote: »

The UK markets are pricing in or have priced in two very small rises already over the next 2 years, hardly a worry, and anyway the £ has been getting stronger, not weaker against to USD.

It's a classic case of when your Mum screamed at you "would you jump in the river if they told you", just because the Yanks have to raise rates does not mean we have to, this is not pre 1990's anymore, we are not pegging the $

Post up some charts then, to show the divergence after 1990.

Filo25

Badegg wrote: »

hi guys, was hoping for some advice. what are peoples thoughts on getting a fixed 10 year mortgage? im thinking of getting a 3bd flat for myself & wife (expecting child soon) and the place were looking at could potentially serve us well until 11+ for the kids (many good schools around)...my only concern is that we wouldnt be able to BTL it if circumstances changed...im still fairly new to mortgages but would be a pain to have to pay a fee to do that...would it just make sense to do 5 years instead? on the other hand im a very pessimistic person by nature and just expect rates to rise a lot (especially if it is to strengthen a weakening pound due to brexit fall out etc). besides how much lower could they go? many thanks for advice. we'd be looking at a 60-70% ltv @ 200-250k area most likely. the monthly expense for 5 yr quotes seem very reasonable and would probably be overpaying if it makes sense...

Personally if it was me arranging a mortgage now at a good LTV level for a long term property, I would strongly consider a 10 year fix, I can't see current rates hanging around for long if we continue to see these upward moves in inflationary expectations and bond yields.

From a political point of view you have the possibility of a Corbyn lead government to consider in 4 1/2 years, I think most would accept that would lead to upward pressure on rates.

As always it is a case of each to their own but there are enough risks around at present to make a 10 year fix attractive to me at least, the likes of First Direct also give you flexibility on overpayments.

_CC_

Filo25 wrote: »

As always it is a case of each to their own but there are enough risks around at present to make a 10 year fix attractive to me at least, the likes of First Direct also give you flexibility on overpayments.

First Direct are still offering 2.5% fixed for 10 years, zero fee and unlimited overpayments. I guess the lenders aren't that concerned about a sudden escalation in rates like some on here.

_CC_

Crashy_Time wrote: »

Don`t know about you, but most people need a buyer, and somewhere else to live, to realise these gains, for many it is just fantasy/paper "wealth".

There's no fantasy about the much lower repayments many of them have enjoyed over the past decade.

A lot of people would have paid off most or all of their mortgage in that time frame, and we still look to be some way off rates at pre-crisis levels.

You could call most things unrealized "paper wealth". Do you have a pension Crashy? Any investments? Where have you been parking the cash while you've been waiting for this crash for 15 years?

chucknorris

Crashy_Time wrote: »

Don`t know about you, but most people need a buyer, and somewhere else to live, to realise these gains, for many it is just fantasy/paper "wealth".

There you go again with your obsession with HPI, I wasn't posting about capital gains. I was posting about the gains coming from the much reduced mortgage payments that will have lasted over a decade by the time the base rate returns to 'normal' (circa 2008) levels. Those gains HAVE been realised, but for the record the capital gains are also valid too, wealth has to be stored somewhere, and especially now cash isn't a particularly good place to store it.

51mm5

Crashy_Time wrote: »

Don`t know about you, but most people need a buyer, and somewhere else to live, to realise these gains, for many it is just fantasy/paper "wealth".

For those with mortgages, the increased equity means a better LTV thus access to better mortgage products.

triathlon

Crashy_Time wrote: »

Don`t know about you, but most people need a buyer, and somewhere else to live, to realise these gains, for many it is just fantasy/paper "wealth".

That might well be true for most homeowners, but the desire to buy their own home never gets easy, EVER. But when t comes to owning a property portfolio it's a different story, they do not have to worry about moving on to anywhere else.