Debate House Prices


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How high will mortgage rates go?

I have been thinking of releasing some of the equity in my flat to buy a house with my girlfriend. My quote for a BTL (let to buy actually) has increased in the last month due to the nature of the situation.

With the collective 'wisdom' of MSE board how high do we think interest rates are about to go in coming months?
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Comments

  • artisan wrote: »
    I have been thinking of releasing some of the equity in my flat to buy a house with my girlfriend. My quote for a BTL (let to buy actually) has increased in the last month due to the nature of the situation.

    With the collective 'wisdom' of MSE board how high do we think interest rates are about to go in coming months?
    25% to 50% and winning lottery numbers are 1 2 3 4 5 6
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    artisan wrote: »
    I have been thinking of releasing some of the equity in my flat to buy a house with my girlfriend. My quote for a BTL (let to buy actually) has increased in the last month due to the nature of the situation.

    With the collective 'wisdom' of MSE board how high do we think interest rates are about to go in coming months?

    My guess is that base rates will stay around the same level they are at the moment and that market interest rates will remain quite a way above that for at least the next year-18 months.

    It's just a guess though.
  • exiled_2
    exiled_2 Posts: 12 Forumite
    Over the next few months I expect the base rate to fall. How much and how soon I have no idea. However over the next 2 to 3 years I expect rates to rise again with a BOE base rate of between 6-8%. I think the BOE has taken is eye off inflationary pressure too much
  • exiled wrote: »
    Over the next few months I expect the base rate to fall. How much and how soon I have no idea. However over the next 2 to 3 years I expect rates to rise again with a BOE base rate of between 6-8%. I think the BOE has taken is eye off inflationary pressure too much
    Is this after GB has gone to the Polls?
  • WTF?_2
    WTF?_2 Posts: 4,592 Forumite
    artisan wrote: »
    I have been thinking of releasing some of the equity in my flat to buy a house with my girlfriend. My quote for a BTL (let to buy actually) has increased in the last month due to the nature of the situation.

    With the collective 'wisdom' of MSE board how high do we think interest rates are about to go in coming months?

    They'll go lower in the short term because the government wants to stimulate the economy to stave off recession - maybe another 0.5% down in 9-12 months time. It won't work of course ... they let things get out of control when they kept rates too low for too long. Now the market is setting its own rate as the actual cost of money soars.

    Then they'll have to be ratcheted up to try to control inflation as the pound plummets (because of low interest rates) and the cost of everything imported rises on top of price rises because of food and oil bubbles (thanks to the cash the central banks have been pumping in to 'save' the commercial banks). How high? Depends how much inflation we see.

    For house buyers, the trick will be to balance out the variation in prices, interest rates and inflation.
    --
    Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
  • exiled_2
    exiled_2 Posts: 12 Forumite
    BTLNEWbie wrote: »
    Is this after GB has gone to the Polls?
    The effect of elections on finanical markets appears to be very short term. As an aside, the stock markets appear to slide before an american presidential election and go up once the result is known regardless of who wins. Markets don't like uncertainity.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    A 8% was always the historical average for interest rates, I've always done my financial calculations based on this figure.

    It's only recently they've been so low, so irrespective of what people on a forum think, or what recent history has shown, it would be prudent to do your sums on 8% and see how it looks.
  • exiled_2
    exiled_2 Posts: 12 Forumite
    A 8% was always the historical average for interest rates, I've always done my financial calculations based on this figure.

    It's only recently they've been so low, so irrespective of what people on a forum think, or what recent history has shown, it would be prudent to do your sums on 8% and see how it looks.

    Fully agree. I suspect a 8% BOE rate is possible in a few years and the average mortgage rate could hit 10%.
  • I can remember them at 15% and that was tough, but I don't think they will go much above 7-8% hopefully for folk with a mortgage.I am lucky that mine has finished but both my daughters have them, and with the youngest one especially (She has five children) it is a struggle.
  • If the Tories get in, we will enjoy a 12% average base rate. Labour may seek other, more effective measures to control inflation such as higher taxation of the rich.

    As most of the British public is thick, it is likely that the Tories will get in at the next election so I'm aiming to be (residential) mortgage free beforehand.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
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