House Price Crash!

nelly_2

rozeepozee wrote:

I dunno what the average mortgage is these days, but I'm about to remortgage and the quote helpfully but scarily gives me a figure for a 1% interest rate rise on my 150K mortgage at an extra £125 per month. I'm not the greatest when it comes to maths, but I calculate that this means if rates go up to 7%, I'd be paying an extra £312/month. I have no other debts, but that still seems like a fair chunk from my net income. How would this affect others here?

I dont think your mortgage going up £312 a month would affect any of us one bit joke.

As mr machine said the rates @ 4.5 have hit th high street and the housing market really hard already another 1% will be very interesting.

meanmachine_2

Imagine taking out a huge mortgage, stretching yourself as far as you can, and then seeing the interest rates not just double, but QUADRUPLE.

Don't think it could happen?

It's just happened in the US, where rates have gone from 1% to 4%.

And with Europe possibly about to nudge rates up, ours could be heading that way too.

Not before Xmas though...And to think I thought the BoE would CUT rates in November.

Wrong again meanmachine (just like all these so-called "experts")

John_M_Business

meanmachine wrote:

Imagine taking out a huge mortgage, stretching yourself as far as you can, and then seeing the interest rates not just double, but QUADRUPLE.

Don't think it could happen?

It's just happened in the US, where rates have gone from 1% to 4%.

And with Europe possibly about to nudge rates up, ours could be heading that way too.

Not before Xmas though...And to think I thought the BoE would CUT rates in November.

Wrong again meanmachine (just like all these so-called "experts")

The whole point of us opting out of the ERM is that we are no longer linked to European rates. Also, note that the rates in the States, though high are NOT even at our level.

I still believe that the BoE will cut rates in November based on what's happening in OUR economy - not 'doing an Arsene' (i.e. looking at other Countries' form).

meanmachine_2

You mean cut them in November?

I'm clearly no economist, but I'd have thought that a US rate at 4.5% by the end of the year (predicted) will put pressure on our own currency, unless we keep ahead of the States.

Aussie rates have gone up, as have New Zealand's. Possibly completely irrelevant, but the pressures are there.

John_M_Business

meanmachine wrote:

You mean cut them in November?

I'm clearly no economist, but I'd have thought that a US rate at 4.5% by the end of the year (predicted) will put pressure on our own currency, unless we keep ahead of the States.

Aussie rates have gone up, as have New Zealand's. Possibly completely irrelevant, but the pressures are there.

Yes - cut (have amended posts ... ). The US have different pressures to ourselves, so I don't think that we will necessarily follow suit.

I believe the rises we had last year and early this year is it until 2006... maybe as late as Q2 2006.

However I am not employed by the BoE - so I defer to their judgement. Suffice to say that I think the figures being bandied around of 7% + are more at home for real estate in Cloud Cuckoo Land, rather than the UK.

hobbesandco

I agree with the point that US has raised their interest rates. Yes they have quadrupled but that's because their starting point was a very low rate of 1%. I believe interest rates will increase in the UK over the short-medium term but they won't quadruple. It may take several years before they reach 7%. We had 5 interest rate jumps in the last year and just look at the effect it's had on the economy. Interest rates would not have to rise much farther to have an even more detrimental effect. Besides our growth rates are lower than those in the States. I can't really see it going beyond 5.75/6%. Any more and the UK would be in dire straits what with the levels of indebtedness.