TelBoy

Although my money's on the mortgage rate going up first!

New Bank of England base rate 4%.

OllyK

Marvelous - that's gonna bump the mortagage up to over £80 a month now

Goochie

and that is a rise of how much ?

J S W

Rise of .25%

Dracoro

good (well, for me at least).

unclebuck

As a saver I'm pleased Might help to slow some people's credit spending too.

TopBanana

Do you think we'll see a whole percentage point rise this year overall? Got a feeling we might.

milo

as someone in about fifteen gazillion quids worth of debt with no savings.. im not too pleased.

but its all on mortgage (mind u, half of its fixed rate).. so i guess i can always sell if i want (but at that point everyone does, prices go down etc)

imho credit spending is a VERY good thing and id have liked to have seen rates go down even more.

alcazar

iTrader: (2)

That's right, get the rate up as high as we can, make the pound even stronger, then we can all moan about not being able to export stuff:


Alcazar

SiPie

Do you live in a half bedroom caravan on a toxic waste site

That's some mortage you've got

Goochie

or you're just very old

OllyK

lol - owned the house for a good number of years, was about £35K when I bought it and put down a £10K deposit. They are now going for well over the £100K mark, not bad for a little 2 up 2 down jobbie. Mind you nice big garden for the mutt to play in

OllyK

It's all gonna go pair shaped this year though, assuming the misses can get a new job nearer to Nottingham she wants to move - Ouch, just keep hoping she can't find anything

Nexuas

This is really worrying me actually. We are moving house hopefully on the 16th of Feb, and the new mortgage is really going to stretch our finances, think we will be ok for another 3 or 4 .25% rises, but any more than that and we are really going to be in deep S**T. I would go for a fixed rate, but we would be paying back quite a lot more a month from the begining, at least while the payments are lower we can save a little for the potentially more expensive times ahead?

damage

Us old gits that have been paying mortgages for a number of years and with a reasonable memory can recall rates of 15%, and that was only 10-12 years ago. If these return or it gets anywhere near then a lot of people will be crying in to there beer !!!!!!!

Tiggs

yeah...if the plauge comes back that would be nasty too!

look forward, not back!

john banks

I would have thought that if you are taking on a mortgage on a variable rate you want to be able to afford the repayments if the interest rate doubled or tripled?

How can you run things that tight - are people borrowing silly income multiples?

lightning101

There are people that live on a toast and beans economy - 4 bed house with double garage, two cars, designer furniture, but can barely manage to pay the bills / mortgage and put decent food on the table. They managed to get 250,000 pound house with fixed rate of 2.9% fixed for 3 years with 6 year tie-in. They will be ****ting themselves as the rate is forecast to go up to 4.5% base rate by August 2004 - this will mean probably 1-2% above base rate for building society mortgages meaning 6% instead of 2.9% - basically double the interest - e.g £1500 mortage becomes £2750 including actual loan payback.

Roll on - I'll be there to buy their properties with cash in hand and bugger the interest rate.

King RA

Lets have a think about this. We are in a strong, accelerating economy, low unemployment, increasing wealth countrywide (from dying relatives e.t.c), no sign of an economic trouble ahead.

The Bank of England now controls interest rates so no politician can mess things up for the short term. Is it in the interest of the BOE to cause masses of debt from reposessions from raising interest rates to unaffordable levels?
Are they aware that raising interest rates too much can cause the housing crash they are trying to stop? I think they are.

Are there enough houses in the country to house the local population, + the hundred thousand or so immigrants (they gotta go somewhere) coming in every year?

Do you still think the house prices will crash?

www.housepricecrash.co.uk

STi VII

History will punish us if we don't learn from it, it will punish some more than others...

fast bloke

King - At this point they are merely trying to get people to stop and think - It is working, as people now start listening to the 'when I were a lad and rates was 12%' stories, and at least ease off on the credit abuse.

Most likely outcome is that the big lenders will tighten up their income multiple lending criteria - I have come across this a couple of times since the last rise and would expect it to happen more - They will also start applying MIG fees at a lower threshold as they will want to avoid any pain in the event of a crash. (Say you earn 30k and they now lend you 3.4* salary instead of 3.5 like last month, and bung on a MIG fee of say 1k - Now you can only get a mortgage for 102k instead of 105k, and it wil cost you a bit more.) Changes like these are not gradual, but happen on a particular day. Suddenly the house you could afford yesterday is a couple of grand above your limit, so you set your sights slightly lower. Doesn't have to be 20k lower which would cause a crash, but 4k lower as above will simply cause a slight slowdown in the market. The change in the above case is just under 3%, which has been an average rise for any 8-10 week period in the past year. That being the case, they will need to increase rates in another 8-10 weeks just to peg prices at their current level.
Of course - that only covers the purchase mortgage market - add in credit card frenzy followed by debt consolidation, equity release all the non mortgage related credit and try and prove that a 1% increase wouldn't be justified next month

ALi-B

iTrader: (1)

So when is your bet on all these rates going pear shaped?

When there will be a downturn, people won't afford repayments and the country will be full of repossed houses and goods?

The future looks good for the repossesion and auction companies

Hey...perhaps even house prices may fall within the decade and I can actually afford a house that's not made of cardboard and situated under spaghetti junction