Mortgage Rates

[markc]

2 minutes ago, jayc89 said:

 

The problem is borrowing has been pretty much free for the last 10 years. A generation has been raised on that principle. A large number of fixed rate deals will come to an end over the next 6 months which is when I suspect we'll see things really bite. 

Exactly, just had a conversation with a 30ish woman and she thought interest rates were now an all time high, she didn’t realise double digit rates were quite common pre 2000

[ProDave]

7 minutes ago, jayc89 said:

 

The problem is borrowing has been pretty much free for the last 10 years. A generation has been raised on that principle. A large number of fixed rate deals will come to an end over the next 6 months which is when I suspect we'll see things really bite. 

That is part of the problem.  The sheer number of fixed rate mortgages mean for many the rate rises have not taken effect so no wonder it has not had the desired effect.  So rather than wait for it to ripple down, they raise rated further because it "has not worked"

 

Again that shows lack of understanding.  Lets raise interest rates it's what we have always done......

 

Fixed rates were not a "thing" in my day.

[SteamyTea]

42 minutes ago, nod said:

God help us when labor get in 

At least they will put the people traffickers out of business 

And increase the supply of well educated and experienced workers, who have been educated at at another countries expense.

To bring it down to the corner shop level, which is what is happening, do you want to be only allowed to shop at a truly independent grocery store? It may only sell baked beans and ketchup. Oh hang on, it cannot sell them, they are not British products.

[nod]

1 hour ago, pocster said:

I’m no fan of any party as they are all liars and self serving pricks . But ! I’ve got a feeling Labour might get in as obviously tories will be blamed for brexit , Covid , inflation , house prices etc. the list is endless . Labours current ‘ policies ‘ ( aka more bs for the electorate ) on housing rental and build are ridiculous. But then , if they win they then dilute what was promised and we end up with simply different shite .

I agree 

It was pretty obvious to most that Covid was handled badly 

In my opinion there was no need for a lockdown and paying 80% of wages was ridiculous With the majority of people being better off 

Eat out to help out The list goes on 

 

The problem the Tories have is treating anyone that’s not part of there club as a pleb

Laboure will be the opposite With handouts to those who don’t contribute 

 

 

[SteamyTea]

8 minutes ago, nod said:

Laboure will be the opposite With handouts to those who don’t contribute 

Like newborns, under 14s, pensioners, the sick and the lame.

Listen to this series.

 

Bad Blood

https://www.bbc.co.uk/sounds/play/m001fd36

 

Shows how easy it is to convince people of just about anything.

Edited June 23, 2023 by SteamyTea

[gavztheouch]

In hindsight low interest rates created bubbles in property and stocks at a time when things were quite stable ie 2010-2020. Now we have wars, supply shocks and climate change (transition is expensive) it’s a hell of a time to return rates to normal. 
 

Im 38 was going to build a house a few years ago. Unfortunately I have been saving for years and built up £200k that money is prob only worth £100k today in terms of building rates per m2. That’s a big hit to take, wish I’d bought a house pre covid at least my money would have somewhat held its value. 
 

If house prices fall close to where they were in 2019 I’ll prob buy and knock the self build on the head, for now at least.

[Adsibob]

8 hours ago, ProDave said:

I don't borrow money to buy things.
 

yes you do, your mortgage

 

8 hours ago, ProDave said:

 

So if interest rates go up, it is not going to stop me buying things.

 

yes it is, because your mortgage will (eventually) go up. It will go up much more than any other thing you will have putatively bought on finance, because a person’s home is their most expensive possession, so finance outstanding on a home is typically much greater than any other debt, say on a car, TV or credit card. (Putatively, because I know you don’t buy goods on finance.)

 

8 hours ago, ProDave said:

 

 

 

When I had a morgtage the payments would go up so yes I would have less to spend, so perhaps that slowed my spending?
 

of course it did. If your largest non-discretionary outgoing is your mortgage repayments, and so if/when those go up, that tightens available cash for discretionary spending.

 

8 hours ago, ProDave said:

 

 

but i remember at the time late 80's early 90's job security was my biggest worry so I never spent much anyway trying to build up a buffer of savings, or pay down the mortgage quicker.

Job security, albeit related, is a C separate issue. With rates going up more quickly now, it is more likely we are heading for recession, so people will be more concerned about job security and that will be a further reason to spend less.

[scottishjohn]

On 21/06/2023 at 10:21, SteamyTea said:

The lovely little Tim Hartford did a bit on this today.

 

https://www.bbc.co.uk/sounds/play/m001n1nl

 

Well with listening to as it puts things into perspective. Also confirm a lot of what I, and others, have been saying.

my nortgage rate in the 80,s was 18%-- it  was the big fall in rates that alowed house price to rocket 

  punished those with savings ,

 to the point where normal repayment mortages have dissappeared .

and  its almost impossible to fet one where you cab pay off lumps when you want.

we need to head back to theses -but mortgage companies don,t want you to pay it off --just keep taking the interest on fixeddeals + then stuff you when it runs out even the few banks that used to do a conbined currebnt account=mortgage have gone -which gave you the option to heep paying off nits as you go 

banks want you in debt forever ,

 which helped me to be able to buy my mega plot at a good price --cos I had real money

[Adsibob]

2 minutes ago, scottishjohn said:

its almost impossible to fet one where you cab pay off lumps when you want.

That is not really true. Almost all repayment mortgages allow you to overpay 10% of the outstanding balance a year, whenever you want; ie as a one off payment, or several one off payment. And if you want more flexibility than that, just get an offset mortgage, that offsets your savings against your mortgage. 

[scottishjohn]

1 minute ago, Adsibob said:

That is not really true. Almost all repayment mortgages allow you to overpay 10% of the outstanding balance a year, whenever you want; ie as a one off payment, or several one off payment. And if you want more flexibility than that, just get an offset mortgage, that offsets your savings against your mortgage. 

you may be be rught -but from what friends have told  me they seem to few and far between 

not looked myself for a long time 

[jayc89]

Very similar to cars and HP vs PCP/Lease. Most salesmen look at you in disgust if you want to pay by any other means than PCP. 

[Nick Thomas]

18 minutes ago, scottishjohn said:

its almost impossible to fet one where you cab pay off lumps when you want.

 

Eh, they don't forbid you from making overpayments, they just levy a small fee for the privilege. I think my nationwide ones were 1% of the paid-off balance? Something like that.

 

Cheaper than paying the interest, for sure, but I'm not about to reach for a calculator.

[Adsibob]

4 minutes ago, scottishjohn said:

normal repayment mortages have dissappeared .

Simply not the case. An FCA report published in 2013 found that slightly less than 30% of all mortgages were interest only, with the balance being capital repayment. See https://www.fca.org.uk/publication/research/fca-interest-only-mortgage-review.pdf

 

since that time, the figure is closer to 10%. See https://www.mpamag.com/uk/mortgage-industry/market-trends/uk-finance-reveals-latest-data-on-interest-only-mortgages/407045

 

[Adsibob]

19 minutes ago, scottishjohn said:

you may be be rught -but from what friends have told  me they seem to few and far between 

not looked myself for a long time 

Suggest you base assertion of facts on actual facts, not banter with mates.

[Adsibob]

23 minutes ago, jayc89 said:

Very similar to cars and HP vs PCP/Lease. Most salesmen look at you in disgust if you want to pay by any other means than PCP. 

This I agree with

[joe90]

42 minutes ago, jayc89 said:

Very similar to cars and HP vs PCP/Lease. Most salesmen look at you in disgust if you want to pay by any other means than PCP. 

My son is a car salesman and he tells me they make more money on finance than actually selling the cars!,!

[flanagaj]

On 23/06/2023 at 11:56, nod said:

I agree 

It was pretty obvious to most that Covid was handled badly 

In my opinion there was no need for a lockdown and paying 80% of wages was ridiculous With the majority of people being better off 

Eat out to help out The list goes on 

 

The problem the Tories have is treating anyone that’s not part of there club as a pleb

Laboure will be the opposite With handouts to those who don’t contribute 

 

 

Well said!  Lockdown and furlough was an absolute disaster.  That is why we now have 9% inflation.   99.9% of people had no cause to be worried about covid and we are now all paying the price for the policy response.  Taping off outdoor gyms and not being allowed to buy certain good in the supermarkets, is absolutely laughable.

[nod]

1 hour ago, flanagaj said:

Well said!  Lockdown and furlough was an absolute disaster.  That is why we now have 9% inflation.   99.9% of people had no cause to be worried about covid and we are now all paying the price for the policy response.  Taping off outdoor gyms and not being allowed to buy certain good in the supermarkets, is absolutely laughable.

Lots of free money 

Those fools couldn’t give it away fast enough Clapping to support NHS workers was laughable 

As was the 2% pay rise offered to them afterwards 

There never should have been a lockdown 

I didn’t take a penny As I didn’t have anytime off Neither did my wife and daughter Who where seconded by the NHS for 18 months No time off no holidays At least they got a round of applause each Thursday 

[SteamyTea]

9 hours ago, flanagaj said:

99.9% of people had no cause to be worried about covid and we are now all paying the price for the policy response. 

The deaths in England was around 0.4% of the population.

But that is just deaths, the numbers hospitalised was much greater.

On March 1/4/2020 there were 13,432, 6/7/2023 there were 6,429.  So it has not gone away

At any one time since April 2020, 1% of the population is in hospital with COVID, on average, even today.

 

Now, if you think that COVID was not reduced by physical separation, then there is no argument to be had, but if you do think that physical separation of people and basic precautions, then locking us all down did help.

If the NHS struggled to cope with an extra 681,300 bed.days, how would it have coped with a 30% increase?

 

As for the Furlough.  There is a bit of a myth that the vast majority of people were on it for a full period.

At Peak Furlough, 31% of the workforce were on not at work (12/4/2020), by October 2020, 10% of the workforce where on it.  It then wen up and down as the winter waves came along, but only at about half the rate of the peak.  I did read somewhere that mot people were only furloughed for a few weeks, and as others have said, they, and there family, carried on working.

So there was probably only a hundred people that claimed it for the full period, wish I had been one.

The majority of the longer term furloughed workers were in the hospitality and retail industries, and they were all back to work by August 2020 (Eat out To Help Out).

During the first year (2020) there was little opportunity to spend money i.e. no holidays, moving house, car purchases, so people just saved.  This saved cash was not in circulation, so no multiplier effect.  This reduced, at that time, government tax receipts.  That money is now coming back into the economy (savings being used for everyday purchases).

So while I would rather have not had a pandemic, I do not think it hurt the economy as bad as people think, and it saved a lot of lives and pressure on public services. 

 

Edited July 16, 2023 by SteamyTea

[Dave Jones]

utter nonsense.

 

Lockdown was idiotic, achieved nothing but kill off load of people who didn't have a mild cold/covid but did have cancer/hear disease etc. The very worst cases of covid were nearly all due to other underlying issues anyway.

 

Rules were nonsense for example you could sit without a mask to eat but stand up ? Goto jail or be fined. Masks were pointless otherwise zero doctors and nurses would have caught it right as they all wear them ? Just a gimmick to make the sheep think they were actually doing their bit.

 

Virtually every single decision the gov made was the wrong one, from curfews to paying people to eat out. In fact if they had done the exact opposite in most cases we would be in a much better position now.

 

Should have carried on as normal and managed the sad cases where a lot of already unhealthy people were impacted worse. This group of people could have voluntarily locked themselves down if they wished while the rest of the country carried on.

 

 

 

 

[SteamyTea]

40 minutes ago, Dave Jones said:

utter nonsense.

Well it is good to see that you bothered to spend an hour this morning looking at data and finding out that happened.

I would hate to think that you based your analysis on a politically right of centre viewpoint where no one else matters a toss and the 'sad cases' where not your family.

Now you may not like being challenged, with data and facts, but without bothering to even take a cursory look at the underlying data, you are only expressing, as usual, an ignorant opinion.

 

Edited July 16, 2023 by SteamyTea

[Declan52]

This is a post about mortgage rates not COVID so back on topic please.

[SteamyTea]

3 hours ago, Declan52 said:

This is a post about mortgage rates not COVID so back on topic please.

 

3 hours ago, SteamyTea said:

That money is now coming back into the economy (savings being used for everyday purchases).

It was on topic.

Interest rates are a lot more than 1 single thing.

If the currency weakens too much, interest rates go up, if currency strengthens too much, interest rates go up.

If there is a sector of the economy that is driving inflation i.e. labour costs or energy costs, then interest rates go up.

 

Interest rates are usually the inverse of Bond Yield.

https://www.investopedia.com/ask/answers/why-interest-rates-have-inverse-relationship-bond-prices/

 

Bond Yield

https://www.bankofengland.co.uk/statistics/yield-curves

 

 

[Kelvin]

5 hours ago, Dave Jones said:

utter nonsense.

 

Lockdown was idiotic, achieved nothing but kill off load of people who didn't have a mild cold/covid but did have cancer/hear disease etc. The very worst cases of covid were nearly all due to other underlying issues anyway.

 

Rules were nonsense for example you could sit without a mask to eat but stand up ? Goto jail or be fined. Masks were pointless otherwise zero doctors and nurses would have caught it right as they all wear them ? Just a gimmick to make the sheep think they were actually doing their bit.

 

Virtually every single decision the gov made was the wrong one, from curfews to paying people to eat out. In fact if they had done the exact opposite in most cases we would be in a much better position now.

 

Should have carried on as normal and managed the sad cases where a lot of already unhealthy people were impacted worse. This group of people could have voluntarily locked themselves down if they wished while the rest of the country carried on.

 

 

 

 

It just isn’t as simple as that binary viewpoint.  You have no real idea what would have happened to a non vaccinated population where it was allowed to rip through the country. Long COVID is a significant issue and it will be a few years before we understand the impact of that. All of that needs to be balanced with the knock on effect the collateral damage of locking down to both the economy and health of the populace. But to argue from hindsight that what Governments round the World did was better or worse is just guessing really. 
 

Specifically on mask wearing among surgical staff. The primary reason they wear masks is to protect the patients from infection given they are likely to be immunocompromised. However a study carried out in California showed that mask wearing generally reduced rates of infection which improved depending on the type of mask worn and the duration of wearing it. 
 

 

Edited July 16, 2023 by Kelvin

[Declan52]

Once again and for the last time if you want to discuss interest rates then fill your boots in this topic.

Having it out over what the government did and didn't do during COVID is not for this post . If you want to discuss that then maybe a self build forum ain't the place to have it.