[News] The first interest rate rise in 10 years [Sponsored]

Farehamseagull · Nov 2, 2017

Uncle Spielberg said:
The one big mistake the BofE made recently was reducing interest rates to 0.25% last summer. Absolutely no need to do that. It is just going back to where they had been for 8 years. Had several e mails from lenders already saying their variable and tracker rates will go up the full 0.25% from next month

Totally agree.

And anyone who thinks that modest interest rate rises will cause a drop in house prices is wrong. The only thing that could do that is a massive increase in the number of properties being built across the country and that's just not happening. A high number of people will continue buying property with large amounts of cash as even with slight increases in rates, they will still get a better return on their money from property than keeping it in the bank.

Notters · Nov 2, 2017

bashlsdir said:
We are in the same boat as you, we got our mortgage 4 years ago.

Same here. Very common I imagine.

Normski1989 · Nov 2, 2017

So glad that I got my first mortgage sorted a few months ago, fixed for 5 years. Just got in there in time.

Berty23 · Nov 2, 2017

Bozza said:
Circumstances change though, don't they? People lose jobs, have hours cut or other outgoings arise. What may have been seen as a perfectly manageable increase when a mortgage was taken out, may not be quite the same by the time it happens.

Correct. sometimes shit bad luck can hit! We sold our old house and we're renting for 6 months before getting our new house. We took that chance to look at life insurance etc. By sheer bad luck my wife was diagnosed with cancer in the three months where she didn't have life and critical illness cover - in hindsight we should have set up a new one before cancelling the old but we didn't have a mortgage so figured we could save a few quid. Had she been diagnosed three months earlier or later then we would probably not have a mortgage now (7 years later).

As it is, she survived and her latest offer of life insurance had a premium higher than our monthly mortgage. We are lucky that even though not had a proper pay rise for 7 years we have three healthy kids and her check up went well yesterday and we can afford the extra 10 quid a month.

I don't want sympathy because I don't need it - this is merely to say that shit happens that people can't always help.

Uncle C · Nov 2, 2017

Farehamseagull said:
Totally agree.

And anyone who thinks that modest interest rate rises will cause a drop in house prices is wrong. The only thing that could do that is a massive increase in the number of properties being built across the country and that's just not happening.

Strange how you are so positive that there is only one thing that could cause a drop in house prices. Could I suggest a 10 fold increase in interest rates to a mere 2.5% could do it as well.

Farehamseagull · Nov 2, 2017

Westdene Seagull said:
Since we took our mortgage out nearly 10 years ago our household income has dropped by over 50% AND costs have risen. If we tried to borrow our mortgage today we couldn't. Interest rates of the past ( and I don't mean the 1980's ) will cripple many households who already had to make cutbacks to the bone.

Similar here. We've had two children since we took out our mortgage on the house and my wife has left her job to look after the children. We can afford to get by until she's back at work but couldn't get the same mortgage at the moment. Our fixed period came to an end recently so we just switched product with our current lender for another two year fixed period rather than re-mortgaging and in two years she should be back at work so we can look at other options.

I wouldn't like to be in a position where our mortgage was going up at the moment and feel sorry for those that are going to be adversely affected by interest rate rises because their personal circumstances have changed since they took out the mortgage. I don't understand people celebrating something which might make life incredibly difficult for decent, hard working people.

Captain Sensible · Nov 2, 2017

Normski1989 said:
So glad that I got my first mortgage sorted a few months ago, fixed for 5 years. Just got in there in time.

Me too, just fixed for 5 years last week.

swindonseagull · Nov 2, 2017

Luckily my morgage finishes early 2019.

Steve in Japan · Nov 2, 2017

The number of households on a variable rate mortgage is in the range of 4-5 million per the BBC. Roughly half.

I am surprised at that personally. I though more would have fixed over the last 15 months.

robinsonsgrin · Nov 2, 2017

will take you up on that offer US... been on my todo list for a while!

Triggaaar · Nov 2, 2017

Steve in Japan said:
The number of households on a variable rate mortgage is in the range of 4-5 million per the BBC. Roughly half.

I am surprised at that personally. I though more would have fixed over the last 15 months.

Some will be keeping the rates they were lucky enough to get before the credit crisis.

Bozza · Nov 2, 2017

Steve in Japan said:
The number of households on a variable rate mortgage is in the range of 4-5 million per the BBC. Roughly half.

I am surprised at that personally. I though more would have fixed over the last 15 months.

Inertia.

Personal administration stuff like this feels like a massive ball ache to get stuck into for many, and I include myself in that.

Whether it's car breakdown cover, buildings and contents insurance or the mortgage, it feels easier to just let things renew or persist without checking the alternatives.

"I'll do it next week / month / year"

spongy · Nov 2, 2017

My rent has gone up £150 a month in 3 years. If rates are going up then so is my rent. THeres no way my landlord is going to swallow it is there?

At least it will help with my savings......... oh.

Excellent news.

Herr Tubthumper · Nov 2, 2017

Uncle C said:
And those same people are incapable of asking themselves "what if?". Nope, in with both feet.

If we all “what if-ed” losing our jobs, marriages splitting up, taking lesser paid work, wage deflation and inflation everywhere else no one would buy a house.

Herr Tubthumper · Nov 2, 2017

spongy said:
My rent has gone up £150 a month in 3 years. If rates are going up then so is my rent. THeres no way my landlord is going to swallow it is there?

At least it will help with my savings......... oh.

Excellent news.

Did you ever consider what if?

Thunder Bolt · Nov 2, 2017

beorhthelm said:
easier to foresee than, say, a house price crash.

House prices are down in the north & midlands. There was a news item just last week where a bloke in Leeds bought his house for £113K which is now worth £85K.
It's only London & the south east that are maintaining prices or rising.

Hotchilidog · Nov 2, 2017

Steve in Japan said:
The number of households on a variable rate mortgage is in the range of 4-5 million per the BBC. Roughly half.

I am surprised at that personally. I though more would have fixed over the last 15 months.

I got an excellent variable lifetime tracker which over the last 10 years has worked in my favour so I'll take a bit of a hit on this but not too much as I had budgeted for larger payments at the outset of the mortgage. It's all in the timing, got in just before the crash so I am extremely fortunate that I will not be hit too hard. I do however feel for those who will be stretched by this and any further increases to come.

jakarta · Nov 2, 2017

Thunder Bolt said:
House prices are down in the north & midlands. There was a news item just last week where a bloke in Leeds bought his house for £113K which is now worth £85K.

Its not called Dirty Leeds for nothing.

Thunder Bolt · Nov 2, 2017

jakarta said:
Its not called Dirty Leeds for nothing.

I was in Leeds this morning. The city centre puts Brighton to shame. A lot has been rebuilt & not in a tacky way like the Brighton centre.

As you're aware, there's a lot more to the North than just Leeds, but that was the example I remembered.

Biscuit Barrel · Nov 2, 2017

Steve in Japan said:
The number of households on a variable rate mortgage is in the range of 4-5 million per the BBC. Roughly half.

I am surprised at that personally. I though more would have fixed over the last 15 months.

Why? A fixed rate is normally much higher than a variable rate. My current variable rate is 1.45%. This will now go up to around 1.7%. I can't imagine you could get a fixed rate for anything like 1.7% (I might be totally wrong).

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