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Shamus

Bbc News 10pm - The New Mortgage Fad

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Just mentioned so will be on in a few minutes...keep watching...

<<< Fix for less than 5% for 10 years... 50 years at 3.69% for the chancellor!! >>>

..better go out and buy a few houses then :) (Gordon!!)

Edited by Shamus

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Its not a fad. Its a bloody smart move if your already hocked up to the teeth. There is only one way for interest rates to go mid-term (3-10 years). Thats up. If interest rates hit 8% a lot of people will be crippled. If, as they did in the mid late 80s, they go up to 15%? I would be very happy to be sitting on 4.8% then.

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Just mentioned so will be on in a few minutes...keep watching...

<<< Fix for less than 5% for 10 years... 50 years at 3.69% for the chancellor!! >>>

..better go out and buy a few houses then :) (Gordon!!)

This no doubt will give the housing market that all important spring bounce...!

Prices up by 10% by June then back down by 5% by December!! (+5% this year)

Roll on 2007!

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Its not a fad. Its a bloody smart move if your already hocked up to the teeth.

But of course you pay a premium to lock in those rates and people only think about what will be in their pockets tomorrow, if a fixed rate costs an extra £50 a month people will simply take the risk and spend the money on something else. The whole basis of this boom has been squeezing those monthly payments down so they appear affordable, as we've seen with interest only and the negative-arm's in the US.

People aren't so good when it comes to deferred consumption, think of a 5 year old let loose in a sweet shop.

Edited by BuyingBear

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These have been around for ages, problem is, if you want to leave the mortgage provider or pay back lump sums etc then you pay a huge percentage in fees!!

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Why is the Gov's soapbox (BBC) encouraging sheeple to enter into long term fixed rates?

I do not disagree that rates are cheap and it does make financial sense but this "promotion" seems to be suggestive of variable rates are not so desirable all of a sudden.

Has Greenspan already had a word?

Is the dollar going to come under attack?

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Why is the Gov's soapbox (BBC) encouraging sheeple to enter into long term fixed rates?

I was wondering this myself. This is not news whatsoever!

The government must be trying to entice current OOs to fasten their seatbelts, cos they know we're in for a bumpy ride!!!

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Guest Riser

The key part of the report was in the last sentence:

Of course low long term rates are bad news for pensions who aim to make money by lending long term.

Declining Gilt Yields - Impact On Uk Plc

Very tawdry subject, but this is essentially another way of raping the pension funds again, the FSA made providers cash out of equities 2002-03 onwards at market lows, they said liabilities should be spread across 'low risk' bonds, which is very convenient when government is running massive deficits, this week lots of companies are plugging shortfalls so the protection fund doesn't whallop them with a big insurance liability, the 50 year gilt yielding less than 1%!

Create a market and somewhat limited supply and then force people to buy your stuff! Brilliant. It totally undermines the MPC too, the market ultimately determines yields and government bonds make the base rate look very generous.

Brown is very canny, he is able to do the Indian rope trick.

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Has Greenspan already had a word?

I'd be suprised if he did, Greenspan has long advocated taking out varible rate loans in the US as traditionally fixed rate mortgages have been the norm in the US, of course all this was before he cranked up US rates to 4.5%.

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the Treasury report last year identified how Britain's fixation with variable rate mortgages is potentially damaging to the economy.........Basically it means consumption booms and slumps here are more exaggerated than elsewhere.....because most people's mortgages vary a lot with short term ir movements..

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Back in 2004 at the lowest rates in recent history Greenspan was encouraging peope to go out and borrow on variable rates. Commentators knew this was a highly dangerous thing to do as people would simply overborrow and run the risk of facing higher rates at any point in time during the loan.

http://biz.yahoo.com/pfg/e03greenspan/

Greenspan's Call to ARMs

Alan Greenspan's Call to ARMs Could Put You in Great Financial Danger

http://www.suntimes.com/output/savage/cst-fin-terry045.html

Look before you leap on Greenspan's ARM plug

March 4, 2004

BY TERRY SAVAGE SUN-TIMES COLUMNIST

Don't follow Alan Greenspan's advice! The Federal Reserve chairman isn't supposed to forecast interest rates, but there he was last week, warning home buyers against fixed-rate mortgages and promoting adjustable-rate mortgages to achieve financial "flexibility." Instead, it's likely he's luring many households into financial disaster.

Then roll on a few months:

http://thehousingbubble2.blogspot.com/2005...r-mortgage.html

Then in November 2004, well into his interest rate tightening cycle, Greenspan said in response to a question, "rising interest rates have been advertised for so long and in so many places that anyone who has not appropriately hedged this position by now is obviously desirous of losing money." 15

Homebuyers who took out ARMs shortly before or after Greenspan’s clumsy comment just eight months earlier would likely disagree. They might even feel a bit insulted or somehow cheated. Surely, Greenspan didn’t mean any harm, yet from the rate of growth in ARM financing, it looks as though harm was done.

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In the USA you can get 30yr fixed at good rates :) Imagine the trend will catch on here

Perhaps, but as posted above, it could be too late and peoples greed and the media spin will make them come unstuck.

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In the USA you can get 30yr fixed at good rates :) Imagine the trend will catch on here

Remember what the Government told us way back in 2002:

http://news.bbc.co.uk/1/hi/business/2027576.stm

Mortgages in the UK might have to double in length to 50 years if repayments are to remain within the reach of normal homebuyers, a leading mortgage broker has warned.

Yes, a 50 year mortgage. Debt for life. Why not rent?

The US now have 40 year loans:

http://www.40yearmortgage.org/

Edited by Realistbear

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These have been around for ages, problem is, if you want to leave the mortgage provider or pay back lump sums etc then you pay a huge percentage in fees!!

Not necessarily true - check out Yorkshire Building Society 10yr fix.

Excellent value.

There are too many people on here ignoring the excellent products available and making all their assumptions of market behaviour on a standard 25yr repayment model.

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YES. The dollar is about to be hit by a huge bomb made of Euros and the Upcoming Iranian Oil Bourse

In March Iran will trade oil in euros only. This is what Saddam done and is the real reason for the US led invasion.

For more info http://www.energybulletin.net/7707.html

As the UK is the US's largest trading partner, as goes the $ so goes the pound. Speaking of "huge bombs" will the UN allow Iran to make one or will they issue warnings every 6 months or so to tell them not to be so naughty?

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As the UK is the US's largest trading partner, as goes the $ so goes the pound. Speaking of "huge bombs" will the UN allow Iran to make one or will they issue warnings every 6 months or so to tell them not to be so naughty?

or more to the point ,would YOU be happy at some madman in the middle east having the capability to throw pots of sunlight around just for the hell of it? One would suggest if you were Jewish, probably not.

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Not necessarily true - check out Yorkshire Building Society 10yr fix.

Excellent value.

There are too many people on here ignoring the excellent products available and making all their assumptions of market behaviour on a standard 25yr repayment model.

# 5% before 28/02/07, then

# 4% before 28/02/10, then

# 3% before 28/02/13, then

# 2% before 29/02/16.

Looks like a tie-in to me.

2% of a 200K mortgage = 4K to get out

5% of a 200K mortgage = 10K to get out

Lets hope everything is rosey for at least 10 years then!!!

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or more to the point ,would YOU be happy at some madman in the middle east having the capability to throw pots of sunlight around just for the hell of it? One would suggest if you were Jewish, probably not.

No, im alot happier that a madman in control of the largest Nuclear arsenal is hell bent on turning every country into a democratic one.

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I'm a bear, but I got to admit this is gona shore up the market big time. These deals if already a homeowner are a steal. Even if it does not cause more HPI it will cause even more MEW. It could prevent recession for a few more years but the national and personal debt are going to increase. As long as the countries credit rating stays there with Standard & Poor its rosey.

GB was given 18 months to sort out the deficit 2 months ago. I can't see that it can now be done, there is no prospect of it. The increase in unemployment could be arrested in a couple of months now with the possibility of reversal after.

Years down this line though and we could be in major trouble, the twin deficits in orbit and the collapsing credit bubble coupled with collapsing pension funds and soaring unemployment. A calamity!.

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As the UK is the US's largest trading partner, as goes the $ so goes the pound.

Presumably that's why we've gone from $1.40 to $1.90 to $1.70 to the pound over the last few years?

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No, im alot happier that a madman in control of the largest Nuclear arsenal is hell bent on turning every country into a democratic one.

You're obviously talking about Putin since Russia has the largest nuclear stockpile. Putin seems a little dry and has a kink for control freakery, but I wouldn't say he's a madman nor does he care much for democracy <_<

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  • 335 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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