Anyone concerned by interest rates rising re mortgage?

[Mottie]

I locked some away for a year at 5.44% with Kent Reliance last week. This morning it’s 5.92%. Just over a couple of hundred quid difference over the year but rather in my pocket that theirs. I’ve just phoned up and under the 14 day cooling off period, cancelled it and had them move it to a new account at the new rate. If it changes again in the next 14 days I’ll do the same.

Just sorting out Mrs Motties finances and tried to get on the same deal but there’s nowhere on the Kent reliance website that offers bonds at any price now, which is very strange. I’m assuming that they are changing the rates - again! Maybe it’ll be on there later. If it changes, I’ll bloody well change mine again.

 

[Ivor Windybottom]

Just sorting out Mrs Motties finances and tried to get on the same deal but there’s nowhere on the Kent reliance website that offers bonds at any price now, which is very strange. I’m assuming that they are changing the rates - again! Maybe it’ll be on there later. If it changes, I’ll bloody well change mine again.

I was surprised to see they're offering 3% instant access for Ltd companies, that's a really good deal. Minimum £1000 starting deposit, don't know if you can later withdraw it or need to close the account to get it back.

Definitely stay within the FSCS protection limit though, they seem like the sort of outfit that would vanish in a puff of smoke if the economy hiccups.

 

[Brigadier]

Definitely stay within the FSCS protection limit though, they seem like the sort of outfit that would vanish in a puff of smoke if the economy hiccups

Out of interest, if said outfit went tits up, I wonder just how long it would take for the FSCS to reimburse you?

If it's days or weeks, no problem.
If it drags on for months or years though......

 

[Ivor Windybottom]

If the government had to bail out a major bank then this would massively devalue the £, so everyone's life savings will be enough for a loaf of bread.

It's not really a guarantee of anything.

 

[JohnD]

If the government had to bail out a major bank then this would massively devalue the £, so everyone's life savings will be enough for a loaf of bread.

It's not really a guarantee of anything.

That is not true.

 

[Ivor Windybottom]

That is not true.

Well thank you for your in-depth analysis.

So... big bank goes bust. What next? It will be likely to require involve quantitative fleecing, in other words printing money, as the government's skint and nobody right in their head would want to lend the UK any more. If it's enough to cover the losses of a major bank then the value of the GBP will reduce due to the inflationary effects. If one major bank failed then there'd be a bank run on the rest, causing the government to need to print enough money to take over the entire banking system, causing the value of the GBP to collapse.

Tell me where the flaw in my logic is. There isn't a giant piggy bank at the BoE containing enough money to cover everyone's bank balances.

 

[Justin Passing]

Tell me where the flaw in my logic is.

Basel 2 & 3 do help.
I think it's 13% of the USA GDP goes to paying interest on their debt now. Lots of luvverly inflation will help erode it nicely. Oh and growth, yeah, that, rather slowly. So they say.

 

[JohnD]

Well thank you for your in-depth analysis.

Have you ever heard of Nat West (Royal Bank of Scotland)?

Northern Rock?

 

[Mottie]

Just sorting out Mrs Motties finances and tried to get on the same deal but there’s nowhere on the Kent reliance website that offers bonds at any price now, which is very strange. I’m assuming that they are changing the rates - again! Maybe it’ll be on there later. If it changes, I’ll bloody well change mine again.

Still nothing on Kent reliance offering bonds. Mrs Mottie had a letter saying that her (1 year, 2.58%) bond matures tomorrow and if she doesn’t do anything it will automatically go into a 5.22% bond but what’s happened to the 5.92% 1 year fixed bond they were offering. Or any bond? Strange.

 

[Mottie]

Still nothing on Kent reliance offering bonds. Mrs Mottie had a letter saying that her (1 year, 2.58%) bond matures tomorrow and if she doesn’t do anything it will automatically go into a 5.22% bond but what’s happened to the 5.92% 1 year fixed bond they were offering. Or any bond? Strange.

Just been onto them. They have stopped issuing bonds (oversubscribed?) but the one I opened (I think it was only available for one day) and Mrs Motties default one will still continue. Opened up a 1 year fixed ISA with them too at 5.1% and will put this years ISA allocation into it before they withdraw that too.

 

[ellal]

Feel sorry for those just coming off a fixed rate...

Richie rich sunak of course thinks otherwise, and all those still on one are to blame for stubbornly high inflation according to him. Nothing to do with a devalued currency and a system of corporate governance of course!

Link

"Rishi Sunak has blamed the large number of people on fixed-rate mortgages for his failure to bring down inflation.

The Prime Minister told MPs that the preponderance of home owners on multi-year deals meant that the impact of higher interest rates took longer to feed through and curb people’s spending"

What he doesn't say is that the only ones who really benefit from higher interest rates are the banks.
If you are coming off a fixed rate, then most people will raid their savings to pay some of their mortgage off thus filling the banks coffers...

Sadly of course many won't be able to do that and will have to sell up...

We now have one mortgage and kept it through choice as it was a cheap way of funding other things.
At the time it was a choice of 5yr or 10yr, and luckily we went with the latter and still have 5 years to run.
It is now of course much cheaper in effect, but come 5 years time we'll no doubt have to cash in as such and help out those poor banks whilst not investing so much for our family.

 

[Mottie]

So, you still have a mortgage? At your age? Dodgy.

I suppose that £950k pot of investments, cash, currencies you bragged of a while back must be over the million now. You'll be supping pints in t'same pub as Dork before long.

 

[ellal]

So, you still have a mortgage? At your age? Dodgy.

At your age maybe, not mine

Plus what's wrong in taking advantage of ultra low mortgage rates and getting a better return in investments than by paying off the loan?

I suppose that £950k pot of investments, cash, currencies you bragged of a while back must be over the million now.

Much less actually...

Still left with an ample amount for when retirement eventually comes...

But having many more years enjoying watching your kids thrive having helped them out so they don't have to worry as much about the future is worth far more than a larger pot for us...

That was always the plan!

You can't enjoy that money when you're gone, or suffering the 'joys' of old age can you

 

[TeaAndBiscuits]

Feel sorry for those just coming off a fixed rate...

Richie rich sunak of course thinks otherwise, and all those still on one are to blame for stubbornly high inflation according to him. Nothing to do with a devalued currency and a system of corporate governance of course!

Link

"Rishi Sunak has blamed the large number of people on fixed-rate mortgages for his failure to bring down inflation.

The Prime Minister told MPs that the preponderance of home owners on multi-year deals meant that the impact of higher interest rates took longer to feed through and curb people’s spending"

What he doesn't say is that the only ones who really benefit from higher interest rates are the banks.
If you are coming off a fixed rate, then most people will raid their savings to pay some of their mortgage off thus filling the banks coffers...

Sadly of course many won't be able to do that and will have to sell up...

We now have one mortgage and kept it through choice as it was a cheap way of funding other things.
At the time it was a choice of 5yr or 10yr, and luckily we went with the latter and still have 5 years to run.
It is now of course much cheaper in effect, but come 5 years time we'll no doubt have to cash in as such and help out those poor banks whilst not investing so much for our family.

Only something like 30% of properties in the UK have a mortgage on them anyway.

 

[ellal]

Only something like 30% of properties in the UK have a mortgage on them anyway.

If that's true, then it is a much smaller percentage who are on fixed rate mortgages...

So why is richie rich sunak blaming the inflation rate on that small percentage?

Deflection tactics to take the heat off his Bankster mates!