View Full Version : Uh Oh!! Interest rates are going up again!
As above, looks like they are going up to 5.5%. It is now six srtaight rises in a row and I don't think it is going to stop in the next couple of years!
Feel so sorry for people who are trying to get on the ladder and even more so for the people who have bought in the last 2 years and stretched themselves already........:(
I can see reposessions galore if things carry on. I want to move house in a couple of years, looks like I'll have to stay put for the time being!!:rolleyes:
H.
I agree. I think the low rates over the last few years have resulted in a lot of people borrowing way over the odds. If they continue to rise, I think a lot of people will lose their homes.
Fixed for another 4 years, hopefully that'll be enough.
I'm still not sure how high they'll go though, with the government move around especially whoever's in power will be trying not to let it get too high cos that upsets the people - but they need it to rise to reduce inflation.
One of the few times im glad i rent!
Funny situation though, bank of england controls public spending by tweeking interest rates. House prices have made it near impossible for first time buyers to purchace a house. This means the vast majority of people around my age and younger rent, which surly means the banks grip on the public is diminishing.....
Also, with so many people buying to let, its a competative market which is why my rent hasnt risen in 5 years - id simply leave and go somewhere cheaper! With this in mind, and constantly rising house prices, surly the whole system is going to implode as people cant make enough money from letting to cover the mortgauge payments on the house :blink: Which will result in a shortage of lettings and and an abundence of over priced houses most cant afford.... hello council houseing, oh no you sold most of them off lol
Oh sweet, waiting for a crash on property market to buy, buy, buy :D
Oh sweet, waiting for a crash on property market to buy, buy, buy :D
*chants* crash crash crash crash :d
RobSheffield
10-05-07, 09:11
Oh sweet, waiting for a crash on property market to buy, buy, buy :D
:yeahthat:
:D
I am lucky/clever enough to own my house but I want to move to a bigger property for what should be my final move. I am not borrowing £100K to upgrade and then get stiffed by massive rate rises.
We may have to stay here for a couple of years. I will buy my next house just as interest rates start going backwards again...:sly:
In the mean time I will put away the money I would have paid on a mortgage into an account and watch it earn some money for a change!!
H.
I am lucky/clever enough to own my house but I want to move to a bigger property for what should be my final move. I am not borrowing £100K to upgrade and then get stiffed by massive rate rises.
We may have to stay here for a couple of years. I will buy my next house just as interest rates start going backwards again...:sly:
In the mean time I will put away the money I would have paid on a mortgage into an account and watch it earn some money for a change!!
H.
Suits me, if houser price drop, I will then be able to afford to move to a bigger house, a nice 20-30% drop would be good for me, but not for everyone
Quite interesting reading this. I currently rent a flat with my brother, weve lived together for about 2 1/2 years. I'm 26 next month and am now starting to get itchy feet in the sense that i feel i should now be getting on the property ladder. Alot of people say i should but a lot say it will cost you a fortune compared to what you pay now. The 2 of us have seriously considered buying a house together, we get on great, so why not. Can be far less hassle than doing it on your own, with a lodger or perhaps with a girlfriend until the time is right, not just because, its an easy option.
We currently live in my mum and dads flat, but pay the going rate for what we live in, but they will be selling this along with their own home in Feb next year to move away to the country to retire.
Its very difficult to know where to go to get advise on what to do, but i think we have agreed to at least stay where we are until Feb, and re evaluate then. From what i read above, doesnt seem a good time to be wanting to buy a house right now
Quite interesting reading this. I currently rent a flat with my brother, weve lived together for about 2 1/2 years. I'm 26 next month and am now starting to get itchy feet in the sense that i feel i should now be getting on the property ladder. Alot of people say i should but a lot say it will cost you a fortune compared to what you pay now. The 2 of us have seriously considered buying a house together, we get on great, so why not. Can be far less hassle than doing it on your own, with a lodger or perhaps with a girlfriend until the time is right, not just because, its an easy option.
We currently live in my mum and dads flat, but pay the going rate for what we live in, but they will be selling this along with their own home in Feb next year to move away to the country to retire.
Its very difficult to know where to go to get advise on what to do, but i think we have agreed to at least stay where we are until Feb, and re evaluate then. From what i read above, doesnt seem a good time to be wanting to buy a house right now
I think the basic advise is, if you can afford to buy a house COMFORTABLY, then its not a bad idea. If however your going to stretch yourself and put yourself in a dodgy position, for now at least, dont bother.
I could im sure if i did enough research, buy a small flat but it would be smaller and probably in one of the worst places in crawley (supra wouldnt last long!) and id be skint every single month, and probably unable to afford to fix anything that went wrong with the house. Add to that management fees etc for flats. Where as at the moment i can comfortably pay the rent on my nice one bed flat, and if anything goes wrong, landlord pays for it to be fixed.
On the flip side im paying £7000 of someone elses motgage every year and have nothing to show for it. No easy streight forward answer :(
I know what you mean mate, since i have lived in my flat i have payed about £16k in rent, and thats just my half. Hence me getting itchy feet.
Real tough choice to make. The difference with doing this with my bro is that in about 18 months to two years time he will be wanting to settle down with his woman and who knows what situation i will be in in two years. Perhaps renting suits the two of us, for now
I've lost money on houses before, and also made money, I think its a good idea to hang on for a least another 6 months and see what happens, I think they will go up again. I do hope its not to much as it will start to affect my work:)
House prices aren't the problem, it's interest rates, as mentioned:
Suits me, if houser price drop, I will then be able to afford to move to a bigger house, a nice 20-30% drop would be good for me, but not for everyone
If you buy a house and have a mortgage, it's irrelevant whether there's a crash or not - in fact if prices drop the difference between my current house and 'the next house up' will be less! The only problem is when the remortgage means my interest rate goes up!
Basically, if interest rates are low now, get a mortgage and get a long term fixed rate - as long as you can survive through any rises in rates you'll ALWAYS make money in the end (or at least not lose money in rent).
But interest rates are far from low right now though are they Trev?
House prices aren't the problem, it's interest rates, as mentioned:
If you buy a house and have a mortgage, it's irrelevant whether there's a crash or not - in fact if prices drop the difference between my current house and 'the next house up' will be less! The only problem is when the remortgage means my interest rate goes up!
Basically, if interest rates are low now, get a mortgage and get a long term fixed rate - as long as you can survive through any rises in rates you'll ALWAYS make money in the end (or at least not lose money in rent).
That pretty much sums it up.
If the interest rate continues to go up, its means that people will still be buying, however the increase in prices might slow down some.
For example, if I want to spend £1500 per month on a mortgage, the only difference is that I am paying more interest. At the end of the day it will not cause the market to crash, it will just put a holt to the growth on the market. Might actually become a buyers market like they say it is... As right now its a sellers market, I believe.
A long term fixed rate is a good idea... Especially if you are looking at buying now.
But interest rates are far from low right now though are they Trev?
True, so get a capped rate mortgage (if anyone's still doing them!).
I don't think rates will continue rising for the next 2 years TBH, I reckon they'll level off and won't go above 6.
It's tricky if you're not in a safe position, it may be your only option to rent for a few years and see what happens - there's no way of predicting what will happen though so at some point you have to take a risk.
But interest rates are far from low right now though are they Trev?
The rates here are much better than some places... In South Africa the interest rate is at 12.5%, and the market is still growing at about 10 - 15% per year.
Rates went to 15% here not very long ago... Watch out.:(
I'm buying my first house now and managed to get a fixed rate for 2 yeras,will be moving in 3 weeks time if all goes ok ;)
I have offered on a house now, just waiting to hear something back
there won't be a crash, they won't allow it. Besides it needs more than high interest rates to trigger a crash.
My rate is fixed until march 08 so I'll worry about it then :D
As I posted elsewhere, see fool's website (http://www.fool.co.uk/news/property-home/2007/04/13/housing-market-heads.aspx) for handy writeups on crashes.
Stevie Boy
10-05-07, 14:33
I just got on Property Ladder back in Nov '06, it's no mansion but a nice 2bed with adjoining garage that comfortably fits the Sup!;)
After throwing money away on rent for a couple of years and then moving back to parents waiting for a property crash that never happened, ! decided to bite the bullet and got mortgaged up, thank god i opted for Fixed Rate for 2years, as the interest rate's done nothing but go up since November!
I'm glad I managed to clear most of my debts, cards and loans and such and didn't have to sell the Supe before I took the plunge, only downsides is a can't sp*nk money on my car like i used to!
Still at least i've still got it and doesn't owe me anything, seems i'll have to save for any future mods although further than BPU is expensive territory so kinda feels like an "indefinate save" at the mo!
Just hope things don't get as bad as 15% by Nov '08 or i could be in the sh*t, if it comes to it i'll have to get the naggin other half to move in! :rolleyes:
I got on the property ladder early last year and managed to get a 5 year fixed mortgage all my friends told me that was too long who's laughing now :d :p
SUPRASUZUKI
10-05-07, 14:40
I fixed last August for 7 years. That sees the mortgage paid off. No more sweating over rate rises for me.:)
I fixed last August for 7 years. That sees the mortgage paid off. No more sweating over rate rises for me.:)
blimey good move that man :)
there won't be a crash, they won't allow it. Besides it needs more than high interest rates to trigger a crash.
My rate is fixed until march 08 so I'll worry about it then :D
Who's they? I don't think anyone has the power to stop it if things are getting bad, otherwise we would never of had one in the past.
Stevie Boy
10-05-07, 15:00
5 and 7year fixed rate mortgages! How did you manage to swindle that!
Don't remember any offers that long being on the table when signing my life away, still 2years is quite a while and as things have got pretty nasty already fingers crossed theres enough time by then for a turn around.:taped:
Who's they? I don't think anyone has the power to stop it if things are getting bad, otherwise we would never of had one in the past.
The government. They saw what happened last time!
I fixed last August for 7 years. That sees the mortgage paid off. No more sweating over rate rises for me.:)
Good shout, what interest rate is it fixed at if you don't mind me asking??
H.
http://i105.photobucket.com/albums/m224/Feakins/houseprices.jpg
http://i105.photobucket.com/albums/m224/Feakins/houseprices.jpg
Those graphs are what I looked at before. Let's see what happens next. Property prices WILL drop, it inevitable......:blink:
Although I will lose a bit on my current house, I will also save a lot on my new one!!
H.
for all us home owners, now might be a good time to sell up cash in, rent for a few years and buy when the prices hit rock bottom ;)
however no one can truly predict a crash, people were saying there might be one 6 or 7 years ago when I was looking and I nearly held off, so glad I didn't as they then climbed more, to the point I wouldn't have been able to afford what I wanted at the time!
you always do ok out of property if you can be in it for the long term and ride out the hard times
interest rates are still low, relatively speaking. If you're feeling the pressure at 5.5% me thinks you've stretched too far already anyway
toyotasuprauk
10-05-07, 15:39
:yeahthat:
You need somewhere to live anyway so it’s not like any other investment. People that are feeling the increases in the interest rate on a variable mortgage most be unbelievably stretched or have a HUGE mortgage or both.
Stevie Boy
10-05-07, 15:51
Are there's me thinkin someone had decided to post up Dyno charts of their latest Ultra laggy Super Size Single tubbie!:d
On a serious note that graph does look like were set up for a big fall from up there, looks like i'll be stayin in this 2bed for sometime!:blink:
Why does it matter if it falls though? Just don't sell your house during the fall!! It'll soon go up again.
I think you're still throwing more money away waiting 5+ years renting than if you buy now - rather than buying in 5 years during a possible 'drop'.
Stevie Boy
10-05-07, 16:06
Good shout, what interest rate is it fixed at if you don't mind me asking??
H.
I was intrigued to know this as well, i've just checked and my 2year fixed was at 4.980% till 31/12/2008 so i have a month longer at that fixed rate than i thought :trampoline:
Curious to know what rate a lender would offer over such a risky fixed long term like 5 or 7years.
toyotasuprauk
10-05-07, 16:07
I would only expect a lender to fix for seven years if they were pretty sure the rates were going to fall. Only option I had 2 years ago was 2 years fixed.
http://www.britannia.co.uk/mortgage/fixed/7_year/index.html
You can even fix for 25 years let me google it.
I'm on 5 years fixed, 4 years left, it's 5.99% - that's the Northern Rock 100+% mortgage though!
5.49% for 25 years http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1572896.ece
toyotasuprauk
10-05-07, 16:12
Fixed at 5.49% is amazing for 25 years! Bit mad to fix that far into the future anything could happen by then. Personally I think the fixed at 6.95% is at this current moment quite high, might not be in a years time though?
Sorry, just checked, mine's actually 5.99%.
Stevie Boy
10-05-07, 16:16
5.49% for 25 years http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1572896.ece
Blimey that's really good, at least you'd know where you'd stand for the next 25years. No point tracking a base rate which is likely to be higher when you can fix a low rate like that for duration of mortgage!
I am surprised how low the rates are over such a long length of time.
I would imagine they are very inflexible though. All kinds of things can happen during that time, divorce, family expansion etc. Your priorities and demands change from year to year so I would not sign myself up for such a long length of time.
H.
I think the average Base Rate is something like 8% so it does sound like deal, maybe they do it because the chances are you will have to pay it off early and pay a big penalty!
Ahh crap, I am variable :(
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