How much would/did half a % affect you mortgage?

nelly_2

People saying it will get the housing market going again if the BoE drops the base rate, my mate said the last rise only added 15 quid a month to his mortgage which is quite negligable i think, did anyone have any significant rises and are they desperate for a drop?

dccarm

On my current mortgage, a 0.25% rise would increase the monthly payment. However if we get the house we are looking at, a 0.25% rise could bump our payments up by £19. And a full one percent would bump it up by £73, pushing us perilously close to our limit. I fear we might be biting off more than we can chew, so yes a rate drop would be a welcome relief!

meanmachine_2

If £73 a month would push you over the limit you have stretched yourself too far, I'm afraid.

With petrol prices still rising, and taxes on the UP this year (or more likely next), I think you'll find yourself with 73 quid less anyway, whatever int rates do.

THe point about int rates is that they're meant to change sentiment. If people think that falls are on the horizon, then they'll be more inclined to spend.

The problem the BoE has is what to do if they start cutting then find they have to reverse their decision for whatever reason. That'd be worse than the current "do nothing" approach.

nelly_2

Jesus I wouldnt want to live that close to the edge neither 73 quid a month is nothing

dccarm

Sometimes you need to stretch yourself to get your dream house though. And how do you know where my finances are likely to be in a year's time? I might have loan repayments for the next 12 months that limit my short term ability to pay. (Not tom mention a wedding in April!)

nearlyrich

We don't have a mortgage now, wetook advantage of the falling rate to pay it off more quickly, as when I first had a house the mortgage rate was about 15%. As the rate dropped we carried on paying the same amount either off the mortgage or into a savings account to be paid off as a lump sum when the terms allowed,along with frequent remortgaging to get the best deals.
I would never want to be in a position where a change in the mortgage rate meant a massive change in my standard of living. I know people who's houses were reposessed and others who got into negative equity in the early 90's and I would advise caution when taking on a loan where this would be a possibility as the mortgage rate now is about the lowest it has been in many years. Along with the view that the market is about to crash, the chances of selling a house which you can't afford at the same price or more than you paid for it arn't too high.

DrStep

Everyone has overstretched for SOMEWHERE TO LIVE (let alone a dream house). What does the future hold?

We have record debt as a nation which will have to be paid back. (http://www.creditaction.org.uk/debtstats.htm)

Consumer spending is heading towards a recession

Taxes on the rise

Fuel on the rise

Utility bills on the rise

Food costs rising

Compouded by low wage inflation, lowering employment http://www.statistics.gov.uk/cci/nugget.asp?id=12.

All the BoE can do is to help us to is lower interest rates - a small consolation.