BOE MPC raises interest rates by 0.25% to 0.50%

Thrugelmir

lisyloo wrote: »

I don't see mortgages as a big issue, but some people are indebted with other types of debt e.g. proper loans, payday loans, loans from family which have less stringent checks.

Growth in personal car leasing and HP as well.

Filo25

All that said for now we are just back to the rates we were at last summer anyway, so not exactly a terrifying rise for most people, although no doubt it will cause pain for some who are right on the edge.

Graham_Devon

michaels wrote: »

Given that if you have taken out a mortgage in the last few years affordability has been checked up to 7% interest rate it is not going to be new borrowers who are impacted and at least in the SE longer borrowers are likely to have a fair chunk of equity.

Trouble is, many mortgages were excluded, and those were included before June 17 actually (in the main) only stress tested at 3% above base rate. The BOE changed their rules in June 17 to stress test at 3% above the SVR rate (and therefore more in line with 7%).

This only looks at mortgages "high LTV" mortgages with less than a 5 year fix.

Not sure if that includes 5 year fixes or the "less than" part excludes 5 year fixes from the stress testing.

Not a concern at .25% increase. But could be if increases continue, which I'm not sure they will.

marsman802

Filo25 wrote: »

Given the rise though I was unsurprised to hear how dovish the BoE was sounding on future increase, implying we might be at around 1% base rates by late 2020 (on current expectations obviously), a lot of people have been talking about rapid rises from here, I still struggle to see any obvious driver for that, and it sounds like they are of the same view

What can they do other than talk that way? If they start spooking people with talk of faster, steeper raises it'll just cause a lot of people to close their wallets and wobble the economy again.

We are only back to levels seen last year but it's a rise - and that concept alone is alien to so many even if it does only affect 10-11% of mortgage owners overnight.

They've got to get over the hurdle of the interest only loan maturities first in my view before anything gets punchy.

westernpromise

Filo25 wrote: »

Fixing for 5 years so it is April 2021 before I see any increase

By which time you'll have paid off about 15% of the principal.

I could still payoff the mortgage within term if rates got up to 12-13% by the end of my fix

Not going to happen.

There is now so much more debt in the economy than there was in the 1980s that in terms of dampening consumer demand, a rate of 3% now would probably accomplish what it needed a rate of 15% to achieve in 1990.

There is a persistent fiction among crashtrolls that base rates of 10% are somehow "normal" and a return to them imminent. In fact in 300-odd years base rates have only been above 10% for 20 years and all 20 were between 1970 and 1995. They are a historical thing.

Budgeting that base rates will rise to 40x their level of 2016 is not really budgeting at all in the usual sense.

Filo25

marsman802 wrote: »

What can they do other than talk that way? If they start spooking people with talk of faster, steeper raises it'll just cause a lot of people to close their wallets and wobble the economy again.

We are only back to levels seen last year but it's a rise - and that concept alone is alien to so many even if it does only affect 10-11% of mortgage owners overnight.

They've got to get over the hurdle of the interest only loan maturities first in my view before anything gets punchy.

They were talking a lot more aggressively on rates relatively recently, with real wage growth negative and GDP growth still relatively subdued I don't see a driver for significant rate rises at all, especially with the uncertainty of Brexit negotiations still to play out.

Far from certain to play out that way, but very slow increases seem the most likely scenario at present.

Windofchange

economic wrote: »

i don't really want a hardcore software development job (yet anyway). are there any careers/jobs for intermediate level python programmers?

Hang on, I thought you were retired as per your post a few months ago!? More money than you know what to do with or something like that?

Thrugelmir

ilovehouses wrote: »

The consumer protection act allows people to voluntarily terminate PCP and HP arrangements.

With no liability at all?

lisyloo

economic wrote: »

i don't really want a hardcore software development job (yet anyway). are there any careers/jobs for intermediate level python programmers?

I don't understand what you mean.
If businesses want employees then they expect them to do what the business requires.
I've been in the industry quite a while but I don't know what "hardcore" means. Programmers are expected to do programming.
There would be jobs for intermediate (if you need neither junior nor senior) but those would expect professional experience.
Why don't you look at the job sites?
Quite often you will find that specific positions advertised have mysteriously been filled (or never existed) and are just to get you with the agency, but that's the way it works. You have to go through a process of talking to agencies who will get to know what you want and your skill set. Agents tend to be motivated as they are paid for bums on seats.
Alternatively you can find companies you want to work for and look on their websites and go direct, but that's very slow/hard work. The higher you go up the payscale the more discerning the employer is likely to be about your skillset and that's why if you lack actual experience you'll find it easier at the junior/low-paid end of the scale.

lisyloo

ilovehouses wrote: »

To be honest I suspect people who waste money on cars they can't afford aren't that likely to be particularly frugal in other areas either so probably have plenty of scope for cutting back if needs be.

Agree with you on that, but there's another group who've taken on debts in the past, got themselves into a bit of a pickle with high repayments but have nothing to cut back on i.e. their debt is for past mistakes not current overspending.
Some of those may end up bankrupt.
If they are borrowing from breakyourlegs.com with a large APR then it may got up a little more than £30.