Anyone concerned by interest rates rising re mortgage?
- Thread starter SirGalahad
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We closed all our low interest fixed investments and took the penalty hits to reinvest at the higher rates, when we worked it out it was a no brainer as they had some time to runOn a cheerier note, our one year 2.58% fixed bonds with Kent Reliance mature on the 29th. Same company are now offering 5.3% I dunno if that takes todays rise into account.
I don't think now is the time to test out whether the markets will accept another experiment with an untried economic theory. We all saw how that ended for Liz Truss and Kwasi Kwarteng.
It might well be the case that there have been supply shocks from Brexit, both in tightening the labour market and increasing the cost of supply chains. But bearing in mind the government isn't going to do anything in the short term to reverse these effects, we have to take the hits and do what we can to mitigate against them. It might be that our economy actually has to shrink now, to bring down inflation. Or that we decide to live with high inflation. We still don't know that Brexit is the cause of our sticky inflation, and there's always the chance that yesterday's figure was just a blip, and it will look a lot better next month.
Boomer here who remembers the 14% interest rate on mortgages. Low prices, yeah right. Just missed neg. equity though. All hail the Property Owning Democracy.
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Ellal always has too have a pop at Brexit but his comment about external factors raises the question about how much being the leaders to head off climate change will have a negative affect for the average Joe.
His comment about stable economy made me smile given we weren't subjected to increments in small percentages, more like eye watering increases.Boomer here who remembers the 14% interest rate on mortgages. Low prices, yeah right. Just missed neg. equity though. All hail the Property Owning Democracy.
When we moved from our house in 1990, we sold it for £72K. The bloke that bought it got an £18k sweetener towards buying it from the housing association he was in, for moving out. Never paid a penny of the mortgage off and it was repossessed two years later and it sold for just short of £41K That’s how well houses were as an investment in the early 90’s.Boomer here who remembers the 14% interest rate on mortgages. Low prices, yeah right. Just missed neg. equity though. All hail the Property Owning Democracy.
Boomer here who remembers the 14% interest rate on mortgages. Low prices, yeah right. Just missed neg. equity though. All hail the Property Owning Democracy.
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.leedsbuildingsociety.co.uk/_resources/pdfs/press-pdfs/press-releases/housing-is-now-at-its-least-affordable.pdf
Mortgage rates of 6.43% today are equivalent to a rate of 25.7% in 1980 - housing is now at its least affordable since records began.
As details emerged yesterday that the average 2-year fixed rate mortgage is now 6.43%, Leeds Building Society has looked at historical data to calculate the equivalent mortgage rates.
Interest rates of 6.43% may seem lower than the mortgage rates of 15% which borrowers were paying in 1980 for example, but there is a critical difference: surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the commensurate increase in household indebtedness, mean that the 6.43% mortgage rates of today are equivalent to a rate of 25.7% in 1980 (see Editors’ notes for calculation). In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3% of disposable income (see Editors’ notes).
Today, with the average 2 year fixed rate mortgage on offer to new customers currently standing at 6.43%, those figures are around £292,000 and 45.1% respectively. Housing is now at its least affordable point since records began. The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS). This particularly impacts young people.
Rates of home ownership amongst 25-34 year olds have collapsed over the last 30 years. In 1996, home ownership levels for this age bracket were 65%. By 2016, the level for this age group had fallen to 27% - giving them the label of ‘generation rent’.
Is it any wonder when they don't enter the world of work like back then at 15 and 16 but ponce about on college courses that are quite frankly a waste time in the main.
As has been pointed lots of houses in the country that don't cost you an arm and leg.
As has been pointed lots of houses in the country that don't cost you an arm and leg.
Unfortunately you're still not considering the balance of your debt that you were paying 15% on.
The average UK house price was £285,000 in March 2023, now let's consider that the base interest rate has increased from 0.5% in Feb 2022 to 5.0% today, if you want to talk about "eye watering increases"?
But this is exactly what I'm referring to in that instead of just acknowledging that the world of housing & mortgages is incomparable to your day and recognising the terrible situation facing most young adults in this country, you try to hand wave it away and pretend things aren't that bad because you're OK.
This is why young people are right to be angry, particularly as that exact same generation who are dismissive of their issues are the same ones who voted for Brexit and refuse to admit that it was a terrible choice for the nation.
Let me reiterate too, I'm fine, I'm financially stable and I can afford my mortgage even with the £300 increase this month alone but I still empathise with society and recognise the problems they face.
this has been the result of 40+ years of govt policies
Thatcher flogged council houses
Blair allowed increase in cheap mortgages
last 13 years of Tory govts have seen huge amounts of QE
and now we have houses that people cant afford and rentals too much to afford
sumfing gotta give
Once again, the same old trope ... they're just lazy, they don't have the work ethic we had, they're entitled, they just want to have smart phones and stuff, they could just go and live in some run-down employment black spot surrounded by boarded up derelict buildings.
My daughter was working in a shop at 14... doesn't change the issues she will have to contend with in the next few years in the slightest.
yeah they are in places wiv no jobs innit
businesses + public sector need workers all over the country
if you have a hospital in say Surrey, houses will be stupid money -where do you think the hospital will get its staff from -are they going to commute from Hull?
What you on about I'm ok my daughters have their own house and their mates, they have that thing that helps a work ethic.
Yeah, agreed.. I don't place the blame on either the Tory or Labour Governments alone, they both contributed to this.
The issue is that the policy makers are of a certain class and all have something to gain and something to lose by the decisions that are made, most of them will a "property portfolio" or benefit in some way from their choices. Turkeys don't vote for Xmas.
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