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Rates on the way up?


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I dont think people have fully grasped whats happening in the world and how itll pan out in the UK.

US is raising rates. More so  now the Euro has packed in trying to be a global currency. The US sets the global risk free rate - FED rates/10Y treasuries - our curency, your problem.

UK has to to set its rates at FED rates + 0.5% - no choice. Otherwsie infrlation rises and it needs to raise them anyway. Trashing the poind just does not work - fux all people work i nthe UK, fux all of fux all work in export industries.

Ayyone taking our a post MRMmrotgage will be fine - these are stress tested at 6%/30% of houseghold income.

But the problems are not with MMR mortgages. They are with IO loans and the self certs.

Banks now have to ge ttheir capital up. They need to do this via equity and deposits.

The likes of Nationwide and Covernry BS who are the most exposed in the UK have to compete for savings. Having GS park a bs  ntheir loan means they are fuxed. Or ratehr their over leveraged custoems are fuxed - all that extra spread to beat  GS/Marus is going straight on a IO BTLers SVR.

 

 

 

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There are several 1 year savings bonds at 2% out there. Not ISAs but you can get £2K of savings interest tax free.

https://moneyfacts.co.uk/savings/fixed-rate-bonds/

Now the FED is continuing to raise rates, it will be interesting to see if our savings rates will go up. Why would anyone be interested in sterling at a 2% fix for a year when they can get a 2.25% fix on dollars for a month.

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5 minutes ago, cashinmattress said:

Not that I'm advocating either option... but in the current state of affairs which one is more likely to give you a retirement income?

The current housing market is rather like the Tech. bubble that burnt a lot of people, but at that time seemed eminently sensible.  I would much rather collect my 1.5% and still have a shirt.

 

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Atom Bank 2% for 1Y fixed FSCS protected. They supposedly offer mortgages as well but only the fixed Saver products work. No requirement for a current account, actually they don't offer a current account just savings accounts. 

Not an ISA though so watch out for the £500 interest earned free of tax limit for higher earners

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14 minutes ago, Freki said:

And for instant access I use the NatWest builder account, you have to save £50 a month to get the 1.5% and it is capped at £5000, reduced to 1% up from 5k to 10k. So a smart use of the two is enough to not feel like praising the GS' product

1.5% limit now raised to £10k

They allow joint versions of these accounts, so the Mrs and I have three of them between us.

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1 hour ago, Captain Kirk said:

There are several 1 year savings bonds at 2% out there. Not ISAs but you can get £2K of savings interest tax free.

https://moneyfacts.co.uk/savings/fixed-rate-bonds/

Now the FED is continuing to raise rates, it will be interesting to see if our savings rates will go up. Why would anyone be interested in sterling at a 2% fix for a year when they can get a 2.25% fix on dollars for a month.

I think a lot of people would be cautious about a foreign currency savings account, they do have some risks.

(Of course a foreign currency mortgage is even more risky).

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