O/T Bank of England rates rise to 0.75%

Good job we're about to get our mortgage offer through in next few weeks (hopefully, subject to valuation) and we're emptying our savings into the deposit then. Talk about bad timing, we were hoping to just beat it.

 

Balls ... I could have done with that waiting a few months. Mine is due in January.

 

I've just remortgaged to a 5 year fix at 2.04%. Its been coming for months as the BoE hope to build some wriggle room in for financial stimulus when the recession hits post Brexit.

Its going to be a perfect storm. Increasing interest rates, increased inflation. A sudden fall in employment and tax take and we've massive problems.

 

Will be ringing them to fix ASAP, was on a tracker but that’s going to pot with this raise

 

Obviously its for everyone to take their own financial and mortgage advise. I expect rates to rise by another 2 quarter percentage point rises by the time of Brexit which will equate to another half a percent and a base rate at 1.25%.

I've fixed for 5 years with the intent to pay off as much as possible after the house extension gets done next year.

 

How soon will banks likely increase their rates? I'm applying on Saturday.

 

Many factored in a base rate rise in May which didn't happen but many didn't then reverse it out. So the impact this time, hopefully, may not be as much as the next one.

I read the other day that 2.53% was the typical 5 year fix, up from 2.35% in January.

I used L&C as a broker and they found a far better deal than I could find. I'd recommend having a chat with them or a broker at least. They'll get paid a fee from whoever you choose, but free to you. They may be tied partly, but they still accessed a deal I couldn't have got myself.

 

We were hoping to fix on a 10 year with HSBC at 2.74% but we’ll have to see what the offer comes back as after this increase. They may lump it all on or just raise it a little, it won’t make too much of a difference to monthly payments hopefully but it’s still typical that it’s the highest in 10 years just as we’re buying.

 

Some of you don't know you were born. My mortgage was at 15 percent. Had to make sacrifices like no foreign holidays etc. Happy days under a Wilson government.

 

How do you know we haven't made sacrifices? We've just sold my husband's car this morning as a matter of fact. My mam and dad bought their house at 19yrs old and my mam was a housewife and my dad worked down the pit then in a meat factory and brought up two kids all on one unskilled worker's wage. I was a teacher up until the last 2 years and my husband is a software developer and we can only just afford to buy now at 30. Who could ever buy a house now at 19?! Kids these days are forced by law into a low paid apprenticeship or staying in full time education until they are 18, how on earth are they ever meant to be able to buy a house with the prices as they are no matter whether the interest rate is 3% or 30%?

From the ONS:

• On average, working people could expect to pay around 7.6 times their annual earnings on purchasing a home in England and Wales in 2016, up from 3.6 times earnings in 1997.
  
  
• The median price paid for residential property in England and Wales increased by 259% between 1997 and 2016; median individual annual earnings increased by 68% in the same time period.

https://www.ons.gov.uk/peoplepopula...singaffordabilityinenglandandwales/1997to2016

 

we’ve just sorted a 2 year fixed at 1.99%, only did it Friday, hope it got underwritten in time,

 

Last time it went up it increased my monthly payment by a quid, and will be the same again. I only pay £119 a month

 

Different generations face different problems , I was married at 20 but could not afford to start buying a property until I was aged 26 in 1978 , the interest rate was hovering around 10% in those days but did in fact go as high as 15% which resulted in me having to do two jobs , one in the week & another at weekends , like I said before , different generations different problems.

 

Even better article that shows the madness of house prices now compared to 1971: http://www.thisismoney.co.uk/money/...3/How-items-cost-risen-line-house-prices.html

If house prices had increased at the same rate as everything else the average house would cost £67,000. That would be plenty affordable for everyone. If wages had increased at the same rate as houses the average wage should be around £88,000. Again, that would make houses affordable. It has nothing to do with 'not knowing you are born' and nothing to do with foreign holidays.

 

Yes of course, it's just the comment of interest rates were X amount in the 80s that people like to throw around like they were martyrs without taking into account how much house prices have increased exponentially since then. If all else was equal then fair enough but some people like to pretend that it's just younger people are jetting off every weekend and buying anything and everything they see that is the problem and not that house prices are inflated.

 

My mate and his then wife had a place in Brighton around 1990 time. It was a flat in old building leading down to the sea front and they had a mortgage for over £70k, which seemed pretty ridiculous at the time, but he later told me that they had got really stretched when interest rates went up towards 15%, especially when he found out the wife had also been secretive and frivolous with several credit cards.

 

The housing market is a box of frogs, completely. The London housing market makes a box of frogs look calm and straight forward. In 12 years of being here, despite credit crunches, recessions, flat earnings growth and the Brexit curve ball, prices are still double what they were. Utterly crazy.

 

Looking at it from the other side though, the really low interest rates couldn't go on forever and savings rate have been abysmal for years.

 

The thing is, if house prices were around the £67,000 mark, which they would be had they followed the same inflation amounts as everything else, then 14% interest on that would be a piece of cake. It's the inflated cost of houses that's the problem; a high interest rate on top of that would cripple house buyers. A high interest rate on a low house price isn't fun but it's not really the end of the world.