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Financial Analysts Warn Mortgage Rates Will Go To 14%

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http://uk.finance.yahoo.com/news/mortgage-rates-may-hit-14pc-within-two-years-tele-366a8f9b9a93.html?x=0

Mortgage rates may hit 14pc within two years

Myra Butterworth, 17:40, Monday 23 August 2010
Mortgage rates may climb to 14 per cent within two years, financial experts have warned.
It would be the first time that mortgage rates have reached this level since the recession of the 1990s.
The warning comes after a leading think tank warned that the Bank of England may have to increase interest rates sharply to as high as 8 per cent - to choke off soaring inflation.
Once lenders have added their profit margins, it could push the rates offered to home owners to
12 to 14 per cent
, according to personal finance website Moneyfacts.

8% would have been sweet but 14% would be orgastical.

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I say 15%...no doubt someone will say 16% tomorrow.

F**k it, 20%...we're all doomed.

Merv's gotta go.

p.S. Or are they trying to scare people into BUY NOW, PRICES GOING UP.

Edited by TheCountOfNowhere

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The warning comes after a leading think tank warned that the Bank of England may have to increase interest rates sharply to as high as 8 per cent - to choke off soaring inflation.

Or they could just ignore it?

'Interest rates should remain at 0.5% until 2014'

Personally I've given up looking for rationality from the BoE.

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Anything could happen in the future.

But for now when the Base Rate is 0.5% AND COMPLETELY IRRELEVENT to any loan other than a tracker, Mastercard (LloydsTSB charges Premier Account holders) 30% for a cash advance.

What IS scandelous is the savings rate banks pay.

Noone makes anyone borrow. Equally no bank makes savers make a deposit. Therefore there should be a savers revolt. Total withdrawl of all savings from XYZ bank in a given month.

Don't buy their bonds paying less than the inflation rate locked in for 5 years. Don't buy their financial "packages" Don't keep large amounts on deposit in any type of account.

These bankers are laughing at us all. We are all muppets. They are the canny ones. They have never had it so good.

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So I suppose this means people who currently want to buy will need to continue renting for at least another two years? Who wants to pay 14% to buy a house. Nightmare.

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Or they could just ignore it?

'Interest rates should remain at 0.5% until 2014'

Personally I've given up looking for rationality from the BoE.

lets face it they don't know their elbows from their ar**s, a monkey could do that better than them

in reality everyone with some knowledge knows that to support economy you need to raise rate to much higher level, BUT as these monkies are more worried about housing market they don't proceed with rate rise, WHY!!!

  • Political reasons

  • Banksters

  • Vested interest

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I can remember the heady month when my mortgage rate hit 16%.

There is no absolute rule which says this can never happen again.

We couldn't have anticipated it the first time around.

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We don't need 14 or even 8% my friends....anything above 5% & the "sheep" are toast!

Mike

....going by what is happening now, if they can't pay it we all end up paying for it. :unsure:

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lets face it they don't know their elbows from their ar**s, a monkey could do that better than them

A Perl script would be cheaper (you'd still need to feed a monkey).

Or maybe one of these:

magic_8ball_outlook_not_so_good.jpg

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I say 15%...no doubt someone will say 16% tomorrow.

F**k it, 20%...we're all doomed.

Merv's gotta go.

p.S. Or are they trying to scare people into BUY NOW, PRICES GOING UP.

As I said on the other thread, I believe it is to scare people into SELLING now. Not everyone has a mortgage on every property they own, many can take a good price drop if they must sell, and the banks could do with as many new borrowers at sensible multiples that they can get? Fits with the organised boom and bust theory, sheeple were supposed to have panicked by now and started cutting price to exit the market allowing VI`s and banks to loan on/buy property again? People holding out for peak price all this time was not expected, and makes the situation more dangerous? It will be full steam ahead with the bearish articles now from the media until the crash happens IMO.

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I can remember the heady month when my mortgage rate hit 16%.

There is no absolute rule which says this can never happen again.

We couldn't have anticipated it the first time around.

Can you remember how long it lasted or what your wage increases were?

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I can remember the heady month when my mortgage rate hit 16%.

There is no absolute rule which says this can never happen again.

We couldn't have anticipated it the first time around.

So do I

However i had taken the mortgage at 12% two and a half years before and had had three good pay rises during the inbetween, so the new payment's were still less of my take home pay than they had been at the start.

A few things to remember the first £30,000 of the mortgage attracted miras, in my case and most people i knew that was nearly all of it and that bought the rate down to about 12%.

3x salary mortgage was considered large , and soon became much less than that , due to large pay rises.

The interest rate stayed at that level for 13 months and then reduced quite quickly.

Today with people holding 5x times wage mortgages , no miras and little if any pay rises there will be total collapse of the housing market and the whole economy.

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We don't need 14 or even 8% my friends....anything above 5% & the "sheep" are toast!

Mike

Indeed, what were the average rates in 2007 / 8 iirc 5% and what happened next?

As I said on the other thread, I believe it is to scare people into SELLING now. Not everyone has a mortgage on every property they own, many can take a good price drop if they must sell, and the banks could do with as many new borrowers at sensible multiples that they can get? Fits with the organised boom and bust theory, sheeple were supposed to have panicked by now and started cutting price to exit the market allowing VI`s and banks to loan on/buy property again? People holding out for peak price all this time was not expected, and makes the situation more dangerous? It will be full steam ahead with the bearish articles now from the media until the crash happens IMO.

Interesting thoughts. That really would change my view on how the world is run, for the worse, however, will make it easier for me to better educate my children. I'll be watching this closely over the next 6 - 9 months!

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We don't need 14 or even 8% my friends....anything above 5% & the "sheep" are toast!

Mike

I agree. Last time they hit 5% around early 2008 you could see the pain in peoples faces.

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We don't need 14 or even 8% my friends....anything above 5% & the "sheep" are toast!

Mike

Yeah, I am sure a couple of years ago someone published that rates in the region of 6/7% would be equally as damaging of the whatever rate it was in the early 90's (sorry mind has gone blank). Because of the shear scale of the debts people have.

Thanks Gordo

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I think I'd retire on my housing deposit "income".

Good point, it raises the question, if the housing fund is big enough to buy outright then 14% P.A. income on that would be perhaps big enough inducement to live off it instead.

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Anything could happen in the future.

But for now when the Base Rate is 0.5% AND COMPLETELY IRRELEVENT to any loan other than a tracker...

...

That is such utter ********. Probably the most frequently repeated untruth you'll see on this site, and it really undermines the credibility of HPC

About half of people with mortgages have fixed rates, the other half have some sort of variable rate which either losely follows the BoE rate, or more tightly via a differential cap SVR, or very strickly on a tracker.

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http://uk.finance.yahoo.com/news/mortgage-rates-may-hit-14pc-within-two-years-tele-366a8f9b9a93.html?x=0

Mortgage rates may hit 14pc within two years

Myra Butterworth, 17:40, Monday 23 August 2010
Mortgage rates may climb to 14 per cent within two years, financial experts have warned.
It would be the first time that mortgage rates have reached this level since the recession of the 1990s.
The warning comes after a leading think tank warned that the Bank of England may have to increase interest rates sharply to as high as 8 per cent - to choke off soaring inflation.
Once lenders have added their profit margins, it could push the rates offered to home owners to
12 to 14 per cent
, according to personal finance website Moneyfacts.

8% would have been sweet but 14% would be orgastical.

There is clearly no chance of this. If Merv can keep the rates at 0.5% for so long and in the face of over-target CPI, what could possibly happen which would require the rates to increased to 5% let alone any higher?. I just don't get it. I'll bet that rates will be at 0.5% for at least another 12 months with little prospect of any significant increase for at least a couple of years after that. Good try, but no cigar I'm afraid RB.

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  • 239 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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