[Finance] Base rate increase.
- Thread starter Leekbrookgull
- Start date
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sydney
tinky ****in winky
thats great , i'm glad you are able to empathise with your landlord who may or may not have 15 other properties ...the ****... sorry by the way
And yet again the BofE follow the old failed policy of high interest rates = low inflation. Yet they can't see it hasn't worked even in the last few months.
sydney
tinky ****in winky
we got paid decent money back then
sydney
tinky ****in winky
corporate profits through the roof...
Nobby Cybergoat
Well-known member
- Jul 19, 2021
- 8,632
You have to love the logic. Salad items have been in short supply, so inflation has gone up, so we'll raise rates. They are just desperate to get us onto turnips one way or the other
Bold Seagull
strong and stable with me, or...
Assume you have started exploring options with a Mortgage Advisor such as @Uncle Spielberg already? Depending on equity / other factors there might be options to going on interest only for a period of time, then choosing to pay off what you can in lump sums.
please can people stop saying how high the interest rates got in the past and implying it is not at least as bad now.
My dad did this with me saying it was 14%. I pointed out that this was on a mortgage 2.5 times his salary. So as a proportion of income it was not as much as 5% mortgage for a couple who could only get on housing ladder going for 6 times the combined salary. It is pretty simple maths!
In other news. I have had the monthly text message from the bank about mortgage increases. Still waiting for my first one about my savings account increasing.
My dad did this with me saying it was 14%. I pointed out that this was on a mortgage 2.5 times his salary. So as a proportion of income it was not as much as 5% mortgage for a couple who could only get on housing ladder going for 6 times the combined salary. It is pretty simple maths!
In other news. I have had the monthly text message from the bank about mortgage increases. Still waiting for my first one about my savings account increasing.
- Jul 10, 2003
- 27,786
Very much this NR. If you haven't contacted him already, you need to
sydney
tinky ****in winky
about 40 years ago lots of people went to work , saved their money , had the odd holiday here and there but basically had their mortgage paid off by their late 40's well we couldn't have that could we , i'm with you mate , the banks are ****s which is why i want , so much , for bitcoin to take off but it won't , because they won't allow it , they have got us by the short and curlies.
Normal Rob
Well-known member
yes i have thanks, just this morning i've emailed him following an initial contact in Jan.. It's not US, but someone nearer to me in the west country.
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 36,026
otoh, the rate is now back to the level just before the 2008 Global Financial Crisis, which we could call "normal". its not just harking back to 30yrs ago, we've been through a ~20 period of moderate then very low rates and loose monetary policy that has fuelled asset prices. we were supposed to be warned (i know i was your mileage may vary) of the impact of rate increases to our borrowing.
Hotchilidog
Well-known member
- Jan 24, 2009
- 9,130
I must be missing something here. Inflation is not being driven by a consumer spending boom, inflation has been caused by increased supply side costs, notably energy costs and the war in Ukraine. Interest rates have no impact on these factors, in fact by increasing the debt to those who hold a mortgage the BoE is actually increasing the effects of inflation, this seems utterly barmy to me.
On the flip side those who make their income from sitting on assets will continue to coin it whilst those of us who actually work for a living will find our incomes squeezed yet again.
On the flip side those who make their income from sitting on assets will continue to coin it whilst those of us who actually work for a living will find our incomes squeezed yet again.
SK1NT
Well-known member
Exactly this.. .my step mum saying well we had 18% interest rates in the 80s... it's not comparable. It is just counting...
The average house is about 250k the ave salary 25k. Do the math. No one wants a mortgage for several 100k but unfortunately if that is the only way you will get on the property ladder then so be it.
There was a great article detailing how our current rates now (and this was when they were at 3.5%) were worse than the highs of the 80s.
Here are some similar articles, but none as good.
UK Interest Rate History | Think Plutus
To be able to understand the UK interest rate history, you need a clear and concise timeline of the most critical events in history.
thinkplutus.com
And not only the price I pay for my cucumbers but equally the cost of energy - high interest rates is really going to resolve that one ! Along with cooking oils, grain, fuel etc.
Maybe they should add mortgage prices to the inflation measurement - that would mean every time they increase mortgage rates inflation would go up - giving them an incentive ( if you believe their theory ) not to raise interest rates.
Almost everything that has caused inflation over the last year is entirely uncontrollable by interest rates.
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 36,026
it is somewhat contributing. the bit missing is that US raising their rates, if we didnt £ would be weaker and get more inflation on import prices. also the BoE is directed to keep inflation down and doesnt really have any other tools. same reason the US Fed is doing their rises, to meet the expectation in the market they will respond and do something about inflation. it is partially consumer spending, we had 2 years of rampant buying on the covid hand outs and savings, now feeding through the economy.
We're due to renew (from a fixed) in September and I did one of those calculator things. According to average fixed rates, our monthly payment is likely to go up by £500. Let that sink in for anyone who is saying rates were higher than this before.
Just at the time when my wife's company maternity pay stops and she goes down to statutory as well.
We're very very lucky that we'll be able to afford it until she's back at work, but it certainly won't be comfortable. I feel for you, and fear there will be many people in the same situation - not that that's particularly comforting.
Normal Rob
Well-known member
That amount is roughly what I'm looking at in June.
nicko31
Well-known member
We're the only G7 country in double digits, our situation not helped by labour shortages and spiralling food costs
Hopefully this will be the last rise...
To be fair to current youngsters (I am 43 and been with my wife since uni so we bought young and we are very lucky that we have a nice enough 4 bed and only about 60k left on the mortgage so a few more years).
Relatively close to me is leamington spa. A three bed house https://www.rightmove.co.uk/propert...&utm_source=copytoclipboard#/&channel=RES_BUY you are looking at about 250k entry.
Two people who want to start a family might find it pointless going for 2 bed due to expense of moving so start at bottom end 3. 250k means that if they are graduates on what 25k each then that is five times their combined income. However. To get on the property ladder without the help of the bank of mum and dad they need a 25k deposit.
Renting a 1 bed flat is about 800 quid a month. Council tax, bills. Food etc etc. their take home will be about 40k a year combined. So about 3330 quid a month. Taking out rent and bills how much are they left with? Then how do they get to work? Bus pass or train? All more cost. So how long would it take to save 25k needed for a deposit?
I just don’t see how the maths works.