Monday, Aug 23, 2010
Mortgage rates may climb to 14 per cent within two years, financial experts have warned
Telegraph: Mortgage rates may hit 14pc within two years
It would be the first time that mortgage rates have reached this level since the recession of the 1990s.
Posted by mark @ 07:32 PM (1749 views) Add Comment
14 Comments
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1. smugdog said...
I honestly believe that they'll hit just short of 30% before the night's out.
2. estrader said...
Exactly - Experts have warned that an asteroid *may* hit earth in the next two years.
3. Crunchy said...
1. smugdog said..."I honestly believe that they'll hit just short of 30% before the night's out."
You are already going to be paying that.
Like a frisbee, this comment will most likely go over you head.
4. chubba said...
@ smugdog - yup, this is being reported absolutely everywhere. Even if it is not going to happen the effect on the public at large could be good though. Fear of increasing IRs, and therefore mortgage payments, could lead to potential buyers looking harder at mortgage payments at current AND higher rates to see what they could end up paying and therefore staying out of the market until further falls take place. Secondly, those on the brink of failing to keep up with repayments who have some equity left in their properties may attempt to bale - leading to yet more properties on the market and helping to push prices down again due to lack of buyers. I think the news about high rates is potentially well-crafted propaganda and, whilst not accepting the story as fact, am quite OK with it being reported so heavily.
5. str 2007 said...
It does seem odd that this is being reported sloop heavily & now with increased bank margin to make the number even bigger.
I'd love to know what's behind this as really the story IMO doesn't have much credibility.
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7. symo said...
oooo dear, well it least it won't affect the value of the housing. Will it?? :p
8. Sirmungo said...
interest rates this high will cause a HPC. However, by the time it happens my house deposit will have been eroded away to almost nothing by soaring inflation.
9. Positivo said...
Bring it on, that way those greedy sellers will be forced to 'get real'
10. uncle tom said...
I'm surprised that so many people here are getting lulled into believing that there's no serious risk of interest rates taking off.
The world's central banks have been playing with fire as they attempt to deal with the debt crisis, risking a currency crisis as they do so.
They need to hunker down now, and build defences, but there's not much sign of that happening - I suspect that some are deluding themselves into believing that having got away with QE once, they can play that card again and again..
Don't forget that if confidence in a currency fails, interest rates go crazy; and at that point, it is the markets who dictate to the relevant central bank, and not the other way around.
11. str 2007 said...
Uncle Tom
My feeling is that firstly there is some international agreement going on at governmental level to stop excessive currency speculation. Secondly that the central banks don't actually care too much about the level of their currency as they can roll out the 'good for exports' line.
Also if they cared about currency level, why did they drop rates down as far as 0.5 percent, why not 2.5 percent, which would have still been significant.
But I am basing my believes on actions to date rather than technical fundamentals as so far the technical fundamentals have been wrong ( is the Market should have crashed long ago).
Human behaviour (of banks & public) are playing a far stronger roll in this game.
12. uncle tom said...
"there is some international agreement going on at governmental level to stop excessive currency speculation"
While this trade hasn't made the headlines recently, I think any attempt to curb it would be widely reported. Governments have very little power to control this, short of using exchange controls - which are difficult to implement in the world of electronic cash transfers.
13. str 2007 said...
So far as I understand there is something called the CPP crash protection team a US Government organisation that now steps in to stop/slow huge crashes in stock markets. Couldn't something similar exist for currencies ?
So long as the government are seen to be getting to grips with the deficit and debt problems then I just can't see interest rates up at 8 percent as forcing this would kill the goose that lays those golden eggs.
Obviously time will tell on this one.
I hope to be buying in 18 months so large interest rate rides after that wouldn't surprise me LOL.
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