lozgti

http://news.bbc.co.uk/1/hi/business/5241974.stm

Still a rise.I'm no economist but it seems all the 'experts' were wrong.

There might be a long gap in that graph but it is still going up and has done for a while now

KiwiGTI

And long may it continue. I look forward to the next recession.

Ted Maul

quite a surprise. only 7 of 50 odd chief economists [redicted it.

still, might be better this way than 2 rises later in the year..people saying this is it for the year though

davegtt

No big deal really... Just means we probably wont see any rises later on. Like Ted says, we'll have a year worth of no rises I should imagine.

stilover

Just tell someone who's just bought a new house on a variable mortgage that you've heard interest rate could go up to 5.5 percent by this time next year, and watch them sweat !!!

davegtt

Which idiots bought a new house on a variable mortgage? And even if it did go up to 5.5 you'll see a whole £50 a month more on an £100k mortgage. Not sweating material is it?

The Snug Rhino

steadily it rises??????

so no move for yonks then up a smidge......thats steady rises is it?

stilover

Yeah, but quite a few people will have loaded themselves up to the max, and on top of fuel rises, and extra £50/month would be enough to push people over the edge.
Yes I agree that only an idiot would get a mortgage these days at a variable rate, but as fixed one's charge extra, some people are tempted to just go variable as they will pay less if interest rates stay as they are or lower.

Someone posted on here not so long ago about being in financial mess. It only take's a few little rises here and there for it all to add up, then eventually becoming too much.

davegtt

Yes but like people pointed out, hes probably driving a 20k car that does 20mpg at best. If £50 is too much of a raise you flog it, buy something reliable for £1500 and save a fortune in fuel.... That should be enough to see you 2-3% interest rate rises....

john banks

I have the displeasure of driving a rotter (diesel Zafira which is oozing brake fluid, is like an ashtray, doesn't start well and has unbranded tyres that are not good) whilst my car is being fixed. I thought I could do it, but I'd rather sell everything I own first if it came to it

Reserving a 10 year fixed rate for October at 5.19% with complete flexibility for overpayments for my next mortgage is one of my better decisions I think, and makes up for a recent bad time

imlach

Yes, my 5yr 4.7% fix is now looking like a good decision for once.

imlach

You think that, but once you're out of the performance car scene for a while due to kids/huge house/other, fast cars are an irrevelance If you've been there and done it, it's far easier to get out of it.

It's like Sky - you think you can't do without it, but once it's gone, you don't miss it at all

Anyway, running cars on a budget is far more interesting and fun than shelling out £££'s/month for a performance car. In fact, it's almost the inverse situation. You get more fun the less you have to spend

john banks

Can't get the cars out my system yet, kids permanently on hold

Maybe the turbo nutter Zafira would be OK

Never had Sky, although I get to see all the latest AV gear on inappropriate home visits to feral children inhabiting social housing

imlach

So many ways for ppl to economise anyway if you REALLY need to save £££'s.

1. Ditch your £30/month mobile contract and use PAYG. You don't REALLY need to text/phone all these people.

2. Ditch Sky. Save £40+/month. Freeview has more than enough on it.

3. Subscribe to Freecycle (www.freecycle.org). If something in your house breaks down, you'll get a replacement from there soon enough for free. Tumble dryer breaks? No need to spend £300 on a new one - get one from Freecycle and spend £0.00. Who wants to spend £300 on tumble dryers anyway!

4. Get a bike from Freecycle and cycle a bit more. Saves £££'s in petrol or public transport costs. Hey, gets you fit too

J4CKO

iTrader: (1)

Imlach, good advice mate.

but,

'Maybe the turbo nutter Zafira would be OK '

In the same way that icing a dog turd makes it taste better !

john banks

LOL

dpb

i wonder if 0.25 % existed before this shower came to office

john banks

You have a shower in your office? I suppose that would make cycling a little more convenient.

MattN

I have a variable rate on my new house.

This increase will cost me £10.01 per month. A fixed rate mortgage is more than a variable and you are tied in to it for a certain period. My mortgage means if I get in to trouble I'm not tied down, I can change mortgage (have a 15 year term), sell up and buy something cheaper etc.

You need to consider circumstances before making an such a remark. If we all had fixed rate mortgages people would be stuck in their homes for longer. For me a variable rate at 4.64% was a good deal and gives me flexibility. seeing as I just won £50 on the premium bonds means I'm OK to cover the increase for the next 5 months!

I'm not an idiot and I have a variable rate.

john banks

^ indeed. My worry was if the rates tripled that it could be a squeeze spending out half the net household income on the mortgage, and the house might be difficult to shift in a high interest rate climate. Double whammy to which I didn't want to be exposed. Depends on your attitude to risk.

imlach

it's like this, and it's simple.

Rates can't do down much, but they can go up loads potentially

In recent times, we've been at the lower end of rates.....

N1gel 1970

just saw the announcement on the ch4 news.

as already mentioned, they were saying this morning that the % rate wouldn't be going up.

funny the rise has happened when the house market is at it's quietest

Petem95

I'd be surprised if rates didnt hit 5% by the end of the year as inflation is clearly significant - even if the official figures only show 2.5% (), but then anyone sensible should have nothing to worry about. If youre maxed out on borrowing for that X5, and bought a house in the last couple of years for at insane prices, then you probably stand to get a dose of reality.

People who borrowed amounts that they were able to repay comfortably will simply have less disposible income, and will simply have to adjust their spending habits or save less.

unclebuck

21 quid more a month on the repayments for every 100K of your mortgage.

It's going to push quite a few over-borrowers to the limit, and beyond.

Henrik

iTrader: (5)

Even if the 0.25% rise does not hugely increase mortgage payments it sends a message to potential buyers ("normal" and amateur investors) that interest rates might rise as well as fall. This should hopefully make people reflect a bit more about the insane prices they are paying for property.

Hopefully this rise is the first of many.

davegtt

sarcasm at its best. Who are the jokers hoping for interest rates to rise because they dont have a home of their own already, put your hands up (or post here) Hoping that people will go bankrupt over a .25% rise in rates (ohhhh its going up watch out people your skint already cause your maxed out with your borrowing)

Sorry, can you tell Ive had a beer tonight

J4CKO

iTrader: (1)

Well I for one dont care, Gas Bills, Electric, Petrol, for a change an increase that doesn't directly nail me personally !

Dracoro

Surely it doesn't matter. Interest rates go up, so does mortgage payments for BOTH existing owners and new buyers.

On top of that, a crash is great for many people. It makes trading up to a bigger/nicer place much cheaper. e.g. It currently cost Joe Bloggs £100k to go from his 3 bed semi to a 4 bed detached. Prices tumble and then it only costs £50k to trade up.

All the esscalating prices are only good for speculators/investors who sell (although highly taxed which many forget) or those that like to talk about "how much they've made" (in theory, on paper etc.) Reminds you of the lead up to the dot com crash where we had loads of people banging on about how much their shares 'might' be worth etc. It's only worth something if you sell.

Suresh

Oh the irony!

As imlach says, the trend can only be upwards at the current levels. You are therefore exposed to something that is quite likely to happen. Provided you understand and accept that risk, then you're okay. The fact that you've hedged your interest rate delta exposure with a premium bond assets tells me you don't really understand it though!

and as to the thread title : "steadily it rises" I expect the thread starter might find a little difficulty getting work as a financial analyst...


P.S. I'm fixed for 10 years at a net rate of under 2% in Euros, so what do I care

lozgti

I suppose I could have put 'steadily it falls' if my computer and the BBC graph were upside down