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Are we expecting BOE to remain at 4.75% on 8th February 2025?
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You’re on the mortgage and endowments section of the forum, in what world would higher mortgage rates (with increased risk of negative equity) be good news for those currently indebted?BarelySentientAI said:
No, but I don't believe that my personal circumstances determine what is "great news" for the economy or otherwise.Johnny-Cage said:
Take it you’re mortgage freeBarelySentientAI said:
Why?Woshi said:Great news, hopefully more drops on the horizon.
What is 'bad' about where the base rate is now, and what 'great' thing would happen if it dropped further?
Is this just "I want my mortgage payment to be smaller"?4 -
I'm pleased. Thought they'd probably drop it near the end of the year.
Note:I'm FTB, not an expert, all my comments are from personal experience and not a professional advice.Mortgage debt start date = 25/10/2024 = 175k (5.44% interest rate, 20 year term)Q4/2024 = 139.3k (5.19% interest rate)Q1/2025 = 125.3k (interest rate dropped from 5.19% - 4.69%)Q2/2025 = 108.9K (interest rate 4.44%)Q3/2025 = 98.5k (interest rate dropped from 4.44% to 4.19%)0 -
Because a lot of mortgages are for 25yrs and now even 35 years and the average term remaining is likely over 10 years.Woshi said:
You’re on the mortgage and endowments section of the forum, in what world would higher mortgage rates (with increased risk of negative equity) be good news for those currently indebted?BarelySentientAI said:
No, but I don't believe that my personal circumstances determine what is "great news" for the economy or otherwise.Johnny-Cage said:
Take it you’re mortgage freeBarelySentientAI said:
Why?Woshi said:Great news, hopefully more drops on the horizon.
What is 'bad' about where the base rate is now, and what 'great' thing would happen if it dropped further?
Is this just "I want my mortgage payment to be smaller"?
So one should not be focused on the current rate but the likely rate over the term of the full mortgage (and not just for us but for future generations and for civil society).
If central banks continue to 'save the world' by cutting rates (rather than allowing the economy and prices to adjust) and destroy productivity (which they've done since 2008) then they will continue to make the currency worth less and conversely asset prices cost more - this is inflation.
Either you will end up with asset inflation (loose central bank policy) or general inflation (loose fiscal policy).
But you may be thinking more short term about what your next rate fix is, which is okay too.To solve inequality and failing productivity, cap leverage allowed to be used in property transactions. This lowers the ROI on housing, reduces monetary demand for housing, reduces house prices bringing them more into line with wage growth as opposed to debt expansion.
Reduce stamp duty on new builds and increase stamp duty on pre-existing property.
No-one should have control of setting interest rates since it only adds to uncertainty. Let the markets price yields, credit and labour.0 -
And apart from everything that lojo just mentioned:Woshi said:
You’re on the mortgage and endowments section of the forum, in what world would higher mortgage rates (with increased risk of negative equity) be good news for those currently indebted?BarelySentientAI said:
No, but I don't believe that my personal circumstances determine what is "great news" for the economy or otherwise.Johnny-Cage said:
Take it you’re mortgage freeBarelySentientAI said:
Why?Woshi said:Great news, hopefully more drops on the horizon.
What is 'bad' about where the base rate is now, and what 'great' thing would happen if it dropped further?
Is this just "I want my mortgage payment to be smaller"?
Higher base rate -> lower inflation -> better real return from endowments (yes, it is the Mortgage and Endowments section).
Also better returns on pensions, more stable policy response allowing greater trust from bond market setters, stronger currency re forex, better prospects of incoming foreign investment, less impact on disposable income from increasing prices....
Of course, if your entire concern is "what will my mortgage rate be at its next renewal", then your view will be different.1 -
Didn't destroy productivity. The GFC was a boom funded by debt. That debt still exists.lojo1000 said:Woshi said:
You’re on the mortgage and endowments section of the forum, in what world would higher mortgage rates (with increased risk of negative equity) be good news for those currently indebted?BarelySentientAI said:
No, but I don't believe that my personal circumstances determine what is "great news" for the economy or otherwise.Johnny-Cage said:
Take it you’re mortgage freeBarelySentientAI said:
Why?Woshi said:Great news, hopefully more drops on the horizon.
What is 'bad' about where the base rate is now, and what 'great' thing would happen if it dropped further?
Is this just "I want my mortgage payment to be smaller"?
If central banks continue to 'save the world' by cutting rates (rather than allowing the economy and prices to adjust) and destroy productivity (which they've done since 2008) then they will continue to make the currency worth less and conversely asset prices cost more - this is inflation.1 -
Why do you think productivity went down since 2008? Why 2008 and what debt are you talking about?Hoenir said:
Didn't destroy productivity. The GFC was a boom funded by debt. That debt still exists.lojo1000 said:Woshi said:
You’re on the mortgage and endowments section of the forum, in what world would higher mortgage rates (with increased risk of negative equity) be good news for those currently indebted?BarelySentientAI said:
No, but I don't believe that my personal circumstances determine what is "great news" for the economy or otherwise.Johnny-Cage said:
Take it you’re mortgage freeBarelySentientAI said:
Why?Woshi said:Great news, hopefully more drops on the horizon.
What is 'bad' about where the base rate is now, and what 'great' thing would happen if it dropped further?
Is this just "I want my mortgage payment to be smaller"?
If central banks continue to 'save the world' by cutting rates (rather than allowing the economy and prices to adjust) and destroy productivity (which they've done since 2008) then they will continue to make the currency worth less and conversely asset prices cost more - this is inflation.To solve inequality and failing productivity, cap leverage allowed to be used in property transactions. This lowers the ROI on housing, reduces monetary demand for housing, reduces house prices bringing them more into line with wage growth as opposed to debt expansion.
Reduce stamp duty on new builds and increase stamp duty on pre-existing property.
No-one should have control of setting interest rates since it only adds to uncertainty. Let the markets price yields, credit and labour.0 -
Um........ You are aware of the banking crisis. The near collapse of the entire UK banking system one weekend in October 2008. The necessity for QE and other liquidity support packages. Or was it just a dream. Everything was instantly fixed.lojo1000 said:
Why do you think productivity went down since 2008? Why 2008 and what debt are you talking about?Hoenir said:
Didn't destroy productivity. The GFC was a boom funded by debt. That debt still exists.lojo1000 said:Woshi said:
You’re on the mortgage and endowments section of the forum, in what world would higher mortgage rates (with increased risk of negative equity) be good news for those currently indebted?BarelySentientAI said:
No, but I don't believe that my personal circumstances determine what is "great news" for the economy or otherwise.Johnny-Cage said:
Take it you’re mortgage freeBarelySentientAI said:
Why?Woshi said:Great news, hopefully more drops on the horizon.
What is 'bad' about where the base rate is now, and what 'great' thing would happen if it dropped further?
Is this just "I want my mortgage payment to be smaller"?
If central banks continue to 'save the world' by cutting rates (rather than allowing the economy and prices to adjust) and destroy productivity (which they've done since 2008) then they will continue to make the currency worth less and conversely asset prices cost more - this is inflation.1 -
? I'm just trying to understand why you do not think the central bank policy was not the cause of the crisis.Hoenir said:
Um........ You are aware of the banking crisis. The near collapse of the entire UK banking system one weekend in October 2008. The necessity for QE and other liquidity support packages. Or was it just a dream. Everything was instantly fixed.lojo1000 said:
Why do you think productivity went down since 2008? Why 2008 and what debt are you talking about?Hoenir said:
Didn't destroy productivity. The GFC was a boom funded by debt. That debt still exists.lojo1000 said:Woshi said:
You’re on the mortgage and endowments section of the forum, in what world would higher mortgage rates (with increased risk of negative equity) be good news for those currently indebted?BarelySentientAI said:
No, but I don't believe that my personal circumstances determine what is "great news" for the economy or otherwise.Johnny-Cage said:
Take it you’re mortgage freeBarelySentientAI said:
Why?Woshi said:Great news, hopefully more drops on the horizon.
What is 'bad' about where the base rate is now, and what 'great' thing would happen if it dropped further?
Is this just "I want my mortgage payment to be smaller"?
If central banks continue to 'save the world' by cutting rates (rather than allowing the economy and prices to adjust) and destroy productivity (which they've done since 2008) then they will continue to make the currency worth less and conversely asset prices cost more - this is inflation.
Central banks thought they could control the economy - up and down - a little tweak here and there.
Central banks did not need to cut rates every business cycle in order to save unproductive businesses. They did not need to slash rates to zero and buy govt bonds.
It is the central bank policy of sticking the leaves back on the trees in Autumn that led to all this mess.
It is also the collusion of policy between central banks and govts to promote mortgage debt to keep money supply expanding and home prices rising.
The ever-expanding money supply to chase a 'fixed amount' of homes results in unproductive lending as banks favour govt backed loan security (homes) over lending to productive business.
You say central banks did not destroy productivity. I say they did and with these cuts which are coming, will do so again.To solve inequality and failing productivity, cap leverage allowed to be used in property transactions. This lowers the ROI on housing, reduces monetary demand for housing, reduces house prices bringing them more into line with wage growth as opposed to debt expansion.
Reduce stamp duty on new builds and increase stamp duty on pre-existing property.
No-one should have control of setting interest rates since it only adds to uncertainty. Let the markets price yields, credit and labour.0 -
So your assertion is that it's all a big conspiracy even though we have an entirely different government today than we did a month ago? And it's all about keeping house prices high? Now where did I leave my tin foil hat...lojo1000 said:
It is also the collusion of policy between central banks and govts to promote mortgage debt to keep money supply expanding and home prices rising.Hoenir said:
Um........ You are aware of the banking crisis. The near collapse of the entire UK banking system one weekend in October 2008. The necessity for QE and other liquidity support packages. Or was it just a dream. Everything was instantly fixed.lojo1000 said:
Why do you think productivity went down since 2008? Why 2008 and what debt are you talking about?Hoenir said:
Didn't destroy productivity. The GFC was a boom funded by debt. That debt still exists.lojo1000 said:Woshi said:
You’re on the mortgage and endowments section of the forum, in what world would higher mortgage rates (with increased risk of negative equity) be good news for those currently indebted?BarelySentientAI said:
No, but I don't believe that my personal circumstances determine what is "great news" for the economy or otherwise.Johnny-Cage said:
Take it you’re mortgage freeBarelySentientAI said:
Why?Woshi said:Great news, hopefully more drops on the horizon.
What is 'bad' about where the base rate is now, and what 'great' thing would happen if it dropped further?
Is this just "I want my mortgage payment to be smaller"?
If central banks continue to 'save the world' by cutting rates (rather than allowing the economy and prices to adjust) and destroy productivity (which they've done since 2008) then they will continue to make the currency worth less and conversely asset prices cost more - this is inflation.
Every generation blames the one before...
Mike + The Mechanics - The Living Years2 -
Hopefully the BOE see some sense and don't reduce rates again next month.
There really wasnt any great need to be tinkering with rates yesterday!0
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