if rates went up to 12%........

m00m00

neverdespairgirl wrote: »

Directly, with savings and no debt, we'd be in the clover.

But the economy would be stuffed, so we'd probably get stuffed with it.

I'm in the same situation, I'd personally be very okay

but I'm altruistic enough to see the 'bigger picture'

unlike the worst of the hpi 'junkies' who call for ever higher house prices

IveSeenTheLight

I guess a lot of people would struggle.
They should of course realise there are options such as adjusting the amortization period, going on to interest only and probably a few others.

If your struggling, best to contact the lendor and discuss options with them.

You could as well, really tighten the belts now, cut out any unnecessaries and put away as much money as possible into the mortgage, reducing the LTV, increasing holiday payment options or indeed put it into an accessable account to offset when times are tough

baby_boomer

If rates went up to 12% then the economy would nose-dive and the government wouldn't even have a 1% chance in the next election.

It isn't going to happen. The government would give up on the 2% inflation rate target before they let interest rates rise to 12%.

There may be people on this site who could cope - I'm one of them - but the millions would go to the wall .

overlander

Its out of the governments hands now. The market no longer follows the BOE base rate as it is set far too low. Already the SVR is approaching 8% and shows no sign of slowing. I recon 10% is not out of the running, one thing is for certain the incompetent BOE will not set the rates so forget any influence from the government.

HammersFan

I would manage whatever happened. I'd find a way. I find that healthy mind-set (as opposed to wrrying about what ifs).

Sir_Humphrey

HammersFan wrote: »

I would manage whatever happened. I'd find a way. I find that healthy mind-set (as opposed to wrrying about what ifs).

I have had a play with the BBC mortgage calculator.

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

I reckon at 12%, anyone with a mortgage of less than 2.5x salary should be okay, provided they had no other debts, gave up any expensive hobbies and let the house get a little dated/tatty. This assumes a mortgage repayment period of 25 years. It also assumes that the person pays service charges and ground rent.

Worked example is salary of 30k, (single person), mortgage of 70k, monthly repayment at 12% c£750 (c500 at 7%).

Sir_Humphrey

Double post, sorry. MSE gets glitchy for me around lunchtime.

oldMcDonald

Sir_Humphrey wrote: »

I have had a play with the BBC mortgage calculator.

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

I reckon at 12%, a single person with no children with a mortgage of less than 2.5x salary should be okay, provided they had no other debts, gave up any expensive hobbies and let the house get a little dated/tatty. This assumes a mortgage repayment period of 25 years. It also assumes that the person pays service charges and ground rent.

Worked example is salary of 30k, (single person), mortgage of 70k, monthly repayment at 12% c£750 (c500 at 7%).

Couldn't decide which of the above posts to thank, so thanked 'em both - anyone who goes off and does research rather than just spout whatever random crap is running through their mind (as I am happy to do;)), deserves a click on the thanks button

epsilondraconis

If we had 12% for 2 or 3 years we would be fine due to savings. If during that time I were to lose my job, we'd struggle a bit although we'd still be able to pay the mortgage and bills as I have some insurances in place in cater for that eventuality.

For the last 5 years, I've been squirelling away as much money as possible each month. I guess we're lucky that we've been able to do that. I'm of the mindset that I would prefer the security of knowing that I can afford to stay in our house even if I were not working for 2-3years. I went through a stage of being very worried because we had only a few thousand in savings and was fearful what might happen if I were to lose my job. Five years ago I said to myself, do I want a flash car, plasma TVS and lots of gadgets, or do I want security and to go to bed at night and not worry. I (we) chose the latter.

Still doesn't mean that I don't worry. I guess its a case of finding a balance for the type of person / type of people you are.

Anyway, I should be working right now. Don't want to lose my job now do I...

mizzbiz

oldMcDonald wrote: »

Couldn't decide which of the above posts to thank, so thanked 'em both - anyone who goes off and does research rather than just spout whatever random crap is running through their mind (as I am happy to do;)), deserves a click on the thanks button

Indeed :beer: