Monday, Jun 25, 2007
Let s see if EAs still blame the HIPs
Times: Borrowers urged to fix as lenders pull deals
"Fixed rates have been going up because the City expects the Bank of England to raise rates by another quarter point to 5.75 per cent this summer – possibly at next week’s meeting – and some commentators think they could even hit 6 per cent before the year is out." More than 800,000 borrowers face a £1 billion ‘payment shock’ in the coming months when fixed rates they took out two years ago end."The sharp rise in payments faced by borrowers will almost certainly put downward pressure on house price inflation and could also slow consumer spending as households struggle to absorb the extra costs". Almost certainly!!
Posted by confused76 @ 06:18 PM (152 views) Add Comment
7 Comments
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1. Whiteknight said...
6.00 ? Thats funny thats really funny. And the rest.
2. enuii said...
Ha Ha Ha Ha Ha (mad laugh), I knew low rates would never last 2 years ago so I got myself fixed up at 5.29% until 2012, mmmmm nnniicccce.
3. bryan said...
enuii
What will you do when IR's are 30+% in 2012 then ? ;-)
4. Deadspider said...
"What will you do when IR's are 30+% in 2012 then ? ;-)"
And all new sales based upon the higher rates bring house prices down so you're paying at a fixed rate for a depreciating asset ?
5. Whiteknight said...
What will you do when you read the small print of the mortgage loan agreement?
Cannot technically the bank demand repayment of the loan at almost any time? If they cannot sustain where they fixed , there is probably some nice small print that will allow them to get out.
6. george monsoon said...
Look, Im not vindictive and I don't like seeing people suffer, but when its their own fault, its their own fault. Global inflation is on the up and interest rates Will follow regardless of what you would like to happen. They are NOT going to go down any time soon. Surely common sense would tell you to budget for rate increases in the future, unless of course you are a complete Retard that can't be bothered to read before you sign.
How many people read the bit that says "will you be able to repay the mortgage if interest rates rise by n%"
Im going to rent and wait it out until I can answer that question with YES.
7. Planning4acrash said...
Nice idea Bryan, but I think your prediction may only be an (optimistic) one for Zimbabwe, but for the UK? Repayments on a 5x salary mortgage would be about 150% of salaray at 30% interest rates, house prices would have to equal income with 1x salary multiples the max in that scenario, meaning a house price crash of 85%, from 200k to 30k (conservatively). Basically, everybody would be a cash buyer and mortgages would be an irrelevance of the past. Maybe that wouldn't be a bad thing tho. Me thinks that a recession would happen and nib hp in the bud, with mass unemployment and falling wages way before 30%, possibly a peak oil scenario for, say, 2020-40 if oil goes up to $300-1000/barrel, but unlikely by 2012, but nice try!!!